India: SAIL's crude steel production, sales fall q-o-q in Q1FY24

PSU steel major, SAIL, announced its quarterly results for the quarter ended 30 June. The steel major reported a q-o-q decline in its crude steel production and sales volumes.

The CAPEX was INR 950 crores in Q1FY24 (Q1). The CAPEX plan for FY24 is for INR 6,800 crores of which around INR 1,500-2,000 crores is for maintenance.

Expansion plans: The company has following expansion plans:

• Increase existing capacities by 3-3.5 mnt in current financial year (FY).
  
  
• Capacity expansion at IISCO plant by 4.5 mnt
  
  
• Capacity expansion at Bokaro plant by 3 mnt.
  
  

Highlights:

• Crude steel production down q-o-q: SAIL's crude steel production dropped by 6% q-o-q to 4.7 mnt in Q1, as compared with 5 mnt in the previous quarter. However, y-o-y, the same grew by 9% against 4.3 mnt seen in Q1FY23.
  
  
• Steel sales fall q-o-q: Steel sales registered a decrease of 6% q-o-q to 4.4 mnt in Q1 compared with 4.7 mnt in previous quarter. Sales increased by 7% y-o-y against 4.1 mnt in previous year.
  
  
• EBITDA declines q-o-q: EBITDA stood at INR 2,090 crores in Q1, down 39% q-o-q against INR 3,401 crores in the previous quarter. It decreased 23% y-o-y from INR 2,606 crores in previous year.
  
  
• Profit After Tax (PAT) falls: The company's PAT fell by 86% to INR 150 crores in Q1 from INR 1,049 crores in Q4FY23. Furthermore, the PAT declined by 81% y-o-y from INR 776 crores in the previous year. The profitability was reduced due to fall in net realisations and increased prices of coking coal.
  
  
• High coking coal costs: The high coking coal costs have increased their raw material costs and have been instrumental in reducing the profit margins. The cost of imported coking coal has been INR 21,000/t ($ 254/t) and the indigenous coal costed them around INR 12,000/t ($145/t). They expected the prices of imported coal to go down by INR 4,000-5,000/t ($48-60/t)
  
  
• NSR in Q1: The net sales realisation (NSR) for flat products stands in the range of at INR 67,000/t in Q1. The NSR for long products is in the range of INR 51,000/t.
  
  
• Inventory: The company's finished steel inventory during the end of the June quarter stood at around 0.35 mnt. They also have inventory of 41.44 mnt of sub grade iron ore fines by June, 2023. The company is in process of acquiring necessary clearances for beneficiation and pellet plants in states of Jharkhand and Odisha.