India: SAIL reports y-o-y growth in crude steel production, saleable steel sales volumes in FY'24

The Indian public sector unit (PSU) - Steel Authority of India Limited (SAIL), has reported a better performance for the fiscal year (FY) 2024 (April 2023 -March 2024) period compared to the previous fiscal. The company's saleable steel sales grew at a pace of 7% to 18.4 million tonnes (mnt) followed by 5% growth in crude steel production (19.2 mnt) and saleable steel sales (17.0 mnt) in FY 2024.

The company has proposed improved guidance for 'crude steel production' volumes in excess of 20 mnt for FY 2025. The same for 'saleable steel sales' is projected in excess of 19 mnt.

Moreover, the manufacturer looks forward to an even better performance in FY 2025 over the country's improving economic growth projections against other world economies. The country's Gross Domestic Product (GDP) growth was revised to 6.8% for Calendar Year (CY) 2024 by the International Monetary Fund (IMF) from the previous projection of 6.5%.

Capacity expansions

The manufacturer in the trail of increasing its crude steel production capacity to 35 mnt by FY 2030 from the current capacity of 20 mnt, has planned out the same in a phased manner. The expected increase in the Rourkela Steel Plant (RSP) is around 1.4 mnt and at the Durgapur Steel Plant (DSP) around 0.9mnt in FY 2025.

There had been an announcement earlier for the setup and commissioning of 1 mnt capacity in casters at Bhilai and Durgapur units in FY 2025. In the updates, it has been shared that the 0.8 mnt of the aforesaid caster capacity is alive for beam casting and billet is under trial at Bhilai. The commissioning at Durgapur is expected towards the fiscal year-end.

Other updates:

1. EBITDA: The earnings before interest, tax, depreciation and amortisation (EBITDA) grew decently by 31% y-o-y to INR 12,280 crores in FY 2024 over improved operational performance.

2. PAT: The manufacturer's profit after tax (PAT) also showed a remarkable increase of 44% y-o-y to INR 2,733 crores in FY 2024.

3. Net Sales Realisation (NSR) in Q4 FY 2024: The company's net sales realisation (NSR) for the finished-longs products stood around INR 55,400/t in Q4 compared to the previous quarter's INR 54,000/t. The NSR for finished-flat products dropped to around INR 53,700/t in Q4 FY 2024 against Q3's INR 56,600/t.

As of mid-May 2024, the NSR for finished-Longs stood around INR 54,600/t, while that for finished-flats stood at INR 53,500/t.

4. Borrowings increase in Q4 FY 2024: The manufacturer's borrowings increased to INR 30,593 crores in Q4 compared with INR 28,127 crores in the previous quarter. The company sat on 1.6 mnt of saleable steel inventory at the end of FY 2024, alongside the lower NSR for finished-flat products and was pointed out among the concerns around increased borrowings in Q4.

However, the company liquidated 0.209 mnt out of the saleable steel inventory in April and May 2024, with the current levels recorded at around 1.452 mnt. The company looks forward to a reduction in both the inventory and borrowings in FY 2025.