India: Godawari Power & Ispat Registers Sharp Increase in Billet Output in Q2

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

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

Key Operational performance highlights:

1) Captive Iron ore production fell: Iron ore production from its captive mines stood at 3,05,207 MT in Q2 FY19, less by 26% Q-o-Q and 5% on Y-o-Y basis.

2) Pellet Production moved Up amid high realization: Company produced 5,12,050 MT pellets in Q2 FY19, increased by 15% Q-o-Q and 17% Y-o-Y. Iron ore pellet realisation increased by 14% on Q-O-Q & 34% on Y-O-Y

3) Steel Billet production surge: Company’s Steel Billet production has increased by 21% to 63,618 MT in Q2 FY’19 on Y-o-Y basis and up by 6% on Q-o-Q basis.

4) Wire Rods/TMT production: Company’s Wire rod/ TMT production has significant increased by 33% in Q2 FY’19 to 44,911 MT on Y-o-Y basis and down by 5% on Q-o-Q basis.

5) HB Wire: Company’s HB wire production has observed surge by 10% in Q2 FY’19 to 34,419 MT on Y-o-Y basis and marginally fall by 2% in Q-o-Q.

Key Financial performance Highlights:

1) Sales from Operation: On a standalone basis, the company has reported revenue from operations at INR 712.51 crore in Q2 FY19, surge by 10.75% on Q-o-Q basis, while it is significant rise by 56.7% on Y-o-Y basis.

On consolidated basis, its sales revenue has also increased by 45% Y-o-Y to INR 804.39 crore.

2) PBT: On a standalone basis, the company has recorded PBT of INR 97 crore in Q2 FY19, increased sharply by 590% on Y-o-Y basis. On a consolidated basis, it has increased by 427% to 107.02 crore in the same period.

Ardent Steel performance review:

During the quarter, Ardent Steel – a subsidiary of Godawari Power produced 1,28,329 MT of iron ore pellets & sold 1,11,509 MT of pellets in Q2 FY’19.

Its production and sales increased by 39% and 8% respectively on Q-o-Q basis.

The company claims that its pellet demand substantially increased in the same quarter. Also, due to closure of production facilities by Chinese manufacturers and restriction of use of sinter owing to environmental concerns have fuelled the demand for pellet in the export markets.

Outlook

The global steel demand has been buoyant for last couple of quarters & the prices have been on the increasing trend along with strong demand for iron ore Pellets and finished steel.

The demand outlook is sustainable in view of increasing demand led by infrastructure spending and revival in demand by auto-mobile sector. The outlook for the industry is expected to remain buoyant.

GPIL-Details of Production & Sales figure for Q2 FY’19:

Source: Company Website- SteelMint Research