PSU Steelmaker, Steel Authority of India Limited (SAIL), has posted q-o-q drop in crude steel production, sales in Q1FY’25. The Ministry has given a capex of around INR 6,300 crores for FY25.
Highlights:
Crude steel production down q-o-q: SAIL’s crude steel production fell 7% y-o-y to 4.68 mnt in Q1FY25 as against 5.02 mnt in previous quarter. Meanwhile, the same remained largely flat y-o-y as compared with 4.67 mnt in Q1FY24.
Sales drop 13% q-o-q: The company’s sales volumes dropped 13% q-o-q to 4.01 mnt in Q1FY25 from 4.56 mnt in Q4FY24. However, the same rose 3% on the year from 3.88 mnt in Q1FY24.
EBITDA down q-o-q: The company’s EBITDA declined 37% on the quarter to INR 2,420 crores in Q1FY25 as against INR 3,829 crores in the previous quarter. Meanwhile, the same increased 16% y-o-y from INR 2,090 in CPLY.
Revenue from operations down 14% q-o-q: Revenue from Operations was down by 14% on the quarter to INR 23,998 crores in Q1FY’25 from INR 27,958 crores in the last quarter. Revenue from operations was impacted by decline in Net Sales Realization (NSR) in the domestic steel market, driven by the influx of cheaper imports.
On yearly basis, the same was down marginally by 1% from INR 24,358 crores in Q1FY’24.
Coking coal costs: The cost of imported coking coal was around INR 24,500/t on a landed basis to steel plants, while domestic coking coal was approximately INR 13,500/t. The company anticipates these costs to remain within a similar range in the next quarter.
Inventory: The finished steel inventory stood at around 1.84 million tonnes (mnt) as of 30 June.
Net sales realisations (NSR): The Net Sales Realisation (NSR) was around INR 53,700/t in Q1FY’25. However, it declined by INR 500-600/t in July, with further reductions expected in August.
The average NSR for long steel was around INR 54,000/t and flat steel was INR 53,500/t during the quarter. Furthermore, the prices of longs have witnessed dip of INR 700-800/t in July and flat steel prices dropped by INR 1,500/t.
The company anticipate that increased government spending on infrastructure will boost the long steel segment. However, the flat steel segment faces challenges due to competition from imports.
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