India: Godawari Power & Ispat Set to Commission New Rolling Mill in Jun’19

Godawari Power and Ispat Limited (GPIL) – one of the largest steel producers based in Central India has released its operational results for third quarter of FY’19 ending Dec’18.

GPIL is an end-to-end manufacturer of mild steel wires. In the process, the company manufactures iron ore, Sponge iron, Billets, Ferro alloys, captive power, Wire rods (through subsidiary company), Steel wires, Oxygen gas, fly ash brick as well as pellets.

As per the recent earning presentation release by the company, it is coming up with new rolling mill (wire rod unit) in Raipur with a production capacity of 2,00,000 MT per annum and expected to be commissioned by Jun’19. Company claims that it will reduce cost by INR 1,000/MT on incremental production of rolled products. Presently, it has HB wire capacity of 0.15 Mnt per annum.

Key Operational performance highlights:

1) Captive Iron ore production up 27% in Q3 FY19: Iron ore production from its captive mines stood at 3,87,657 MT in Q3 FY19, more by 27% Q-o-Q while it fell 8% on Y-o-Y basis.

2) Pellet Production down amid regular maintenance: Company produced 4,35,300 MT pellets in Q3 FY19, decreased by 15% Q-o-Q and 6% Y-o-Y on account of temporary shut down plant for regular maintenance for few days. Similarly, pellet sales was also down by 18% to 3,14,395 MT in Q3 FY19 on Q-o-Q and 7% on Y-o-Y.

3) Steel Billet production & sales surge: Company’s Steel Billet production has increased by 32% to 84,130 MT in Q3 FY’19 on Q-o-Q basis and up by 87% on Y-o-Y basis. Its Billet sales has rise significantly by 41% to 33,496 MT in Q3 FY19 on Q-o-Q basis and 103% on Y-o-Y basis.

4) MS Rounds: Company’s MS Rounds production has increased by 4% in Q3 FY’19 to 46,917 MT on Q-o-Q basis and up by 18% on Y-o-Y basis. Its sales has rise by 37% in Q3 FY19 to 22,808 MT on Q-o-Q basis and up by 35% on Y-o-Y basis.

5) HB Wire Production & sales Marginal fell: Company’s HB wire production has observed marginal fall by 4% in Q3 FY’19 to 33,088 MT on Q-o-Q basis and marginally up by 4% in Y-o-Y. Similarly, HB Wire sales has also fall by 2% in Q3 FY19 to 33,289 MT on Q-o-Q basis and down by 4% on Y-o-Y basis.

Ardent Steel performance review:

During the quarter, Ardent Steel – a subsidiary of Godawari Power produced 1,86,518 MT of iron ore pellets & sold 1,68,558 MT of pellets in Q3 FY’19. Its production and sales increased by 45% and 51% respectively on Q-o-Q basis. The company claims that its pellet demand substantially increased in the same quarter from the export as well as in the domestic market.

Godawari Power & Ispat Limited -(Production & Sales fig. for Q3 FY19)

Source: Company Website, SteelMint Research
All Fig. in MT