New Delhi, Dec. 17 -- Domestic steel demand is expected to remain healthy at around 8 per cent in FY2026; however, continued weakness in steel prices is likely to keep operating margins of steel producers under pressure, according to a report by rating agency ICRA.

The report says, the operating environment for domestic steelmakers will remain challenging over the coming quarters amid subdued steel prices, stable but sticky input costs, and an unfavourable global environment. The agency expects industry operating margins to remain largely flat at around 12.5 per cent in FY2026, lower than earlier expectations of a 100-120 basis point improvement.

With muted earnings momentum, industry leverage, measured by total debt to operating profit...