India: Godawari Power and Ispat posts highest ever iron ore, pellet production in FY23

One of central India's leading steelmakers, Godawari Power and Ispat Limited (GPIL), has announced its 2022-2023 (FY23) results. Notably, the company has posted its highest ever annual iron ore mining volumes as well as pellet production and sales in the preceding fiscal.

Performance highlights:

• Total iron ore production in FY23 was 2.59 million tonnes (mnt), a rise of 12% compared to 2.31 mnt in FY22.
  
  
• GPIL's pellet production stood at 2.62 mnt in FY23, an increase of 9% y-o-y compared to 2.39 mnt in FY22.
  
  
• Total pellet sales stood at 1.98 mnt, a rise of 19% y-o-y compared to 1.66 mnt in the previous fiscal.
  
  
• Total steel billet output for the financial year was largely stable at 0.32 mnt compared with 0.33 mnt in the previous fiscal.
  
  

Other highlights:

• Average pellet sales realisation falls: GPIL's average sales realisation stood at INR 9,409/t in FY23, a decrease of 24% y-o-y from INR 12,390/t in FY22.
  
  
• EBIDTA down y-o-y: The company's EBIDTA was recorded at INR 1,133 million (mn) in FY23, down significantly by 39% y-o-y as against INR 1,864 mn in FY22. EBIDTA crashed mainly due to sharp drop in pellet realisation.
  
  
• Production guidance for FY24: The company has kept its production guidance for iron ore pellets at 2.6 mnt in FY24.
  
  
• Iron ore capacity to increase: The company has announced that the existing iron ore mining capacity of its Ari Dongri mine in Chhattisgarh is slated to increase to 6 mnt from the current 2.35 mnt and an iron ore beneficiation plant with capacity of 6 mnt will be set up, which is estimated to be completed by Q3FY24. However, the company does not intend to sell the raw material in the open market as it will be consumed for captive purposes, mainly to cater to GPIL's enhanced production capacity. The company has applied to MoEF for environmental approval for expansion of iron ore mining which is under consideration.
  
  
• Enhancing high-grade pellet capacity: GPIL has proposed to enhance its high-grade pellet production capacity to 5.7 mnt from the current 2.7 mnt by setting up an additional plant within an estimated 36 months. The application for the same is also under consideration of the concerned ministry.
  
  
• Steel billets production capacity to rise: GPIL has proposed to enhance its steel billets capacity to 0.5 mnt by setting up two additional furnaces. The project shall be completed by the end of Q2FY24.
  
  
• Expanding solar power capacity: A 38 MW solar power plant will be installed in Khairagarh (earlier Bemetara). The land acquisition and procurement of solar modules have been completed, construction activities have commenced, and the commissioning of the project is expected by Q2FY24. The third plant's capacity has been reduced to 55 MW (earlier 60 MW) due to constraints in land acquisition. Out of 55 MW capacity, 30 MW already commenced operations on 29 March, while the balance 25 MW is expected to be commissioned by Q2FY24.