Central India’s leading steelmaker, Godawari Power and Ispat Limited (GPIL), recently announced its financial year 2024 (FY’24) results.
Performance highlights:
- Iron ore production in FY’24 was at 2.31 million tonnes (mnt), a decrease of 11% y-o-y as compared to 2.59 mnt in FY’23.
- The company’s pellet production stood at 2.44 mnt in the year under review, down by 7% compared to 2.62 mnt of production volume in FY’23. Production dropped due to maintenance shutdown in Q1FY’24.
- Total pellet sales in FY’24 stood at 1.58 mnt, a fall of 20% y-o-y as compared to 1.98 mnt in the previous year. Sales volume witnessed a decrease due to captive utilisation of pellets for higher sponge iron production.
- Total steel billets output for the year stood at 479,800 tonnes (t), a y-o-y rise of 48% compared to 325,070 t in the previous year. Notably, the company recorded highest ever steel billets production in FY’24.
Investors’ call highlights:
- GPIL misses FY’24 pellet output guidance: The company failed to achieve its FY’24 pellet production guidance of 2.6 mnt amid maintenance shutdown in Q1FY’24 as stated by officials over the investors’ call. To be specific, GPIL achieved production level of 2.44 mnt in the period under review.
- Average pellet sales realisation rises: GPIL’s average sales realisation stood at INR 10,171/t in FY’24, an increase of 8% y-o-y from INR 9,409/t in FY’23. Currently, the company’s main focus is towards domestic market amid better realisations against export market.
- EBIDTA up y-o-y: The company’s standalone EBITDA was recorded at INR 1,307 crores (cr) in FY’24, a y-o-y rise of 14% as against INR 1,143 cr in the previous quarter.
- PAT rises y-o-y: GPIL’s profit after tax (PAT) rose by 15% y-o-y to INR 917 cr in FY’24 from INR 798 cr in FY’23.
- Capacity expansion plan of key units: Godawari plans to enhance its capacity of iron ore mining, pellet and integrated steel plant by 3.65 mnt, 3 mnt (2 mnt now and 1 mnt in the next phase) and 2 mnt, respectively taking the total capacity to 6 mnt, 4.7 mnt and 2.5 mnt, respectively. Notably, enhanced iron ore mining capacity shall be operational on receipt of environment clearance and pellet plant to be completed by Q1FY’26.
- GPIL’s modernisation & maintenance plans: The company’s SMS revamping has been completed and capacity has been increased to 0.525 mnt from 0.4 mnt. On the other hand, debottlenecking capex for rolling mill modification at Urla is expected to be completed by Q1FY’25.
- Solar plants replacing grid power to improve operating margins: Khairagarh’s 23 MW solar power plant has been commissioned and synchronised with grid on 6 February, 2024. Another 20 MW power plant is expected to be completed by June, 2024 in Khairagarh which will address the captive power requirement of fabrication and galvanising plant located at Urla industrial area. Out of total 60 MW capacity, 52 MW has been successfully commissioned at the Hira Ferro Alloys Limited facility in Bemetara. The remaining capacity could not get commissioned because of non-availability of contiguous land. Meanwhile, the company is making efforts to purchase the land for the remaining 8 MW capacity and the same will be installed and commissioned in due course.