SAIL Q4 net profit declines 3% to Rs 1,126 crore amid declining steel prices

Steel Authority of India Ltd (SAIL) reported nearly three percent year-on-year fall in consolidated net profit at Rs 1,125.7 crore for the March quarter of the financial year 2023-24, amid weaker domestic steel prices arising from increased competition from China.

Consolidated revenue from operations stood at Rs 27,958.52 crore, down four percent from the previous year, the state-owned steel maker said on May 20. On a standalone basis, net profit was Rs 1,011.2 crore down from Rs 1,049.02 crore reported in the same quarter last year.

Earnings of steelmakers in India have been strained by a surge in imports of low-cost finished steel products from China, which is dealing with a struggling property sector and elevated US tariffs.

Last week, SAIL Chairman Amarendu Prakash said that the company is is keenly watching Chinese imports after the United States raised tariffs on shipments from Beijing.

Consolidated revenue from Salem Steel plant fell 10 percent to Rs 622.28 crore in the quarter and revenue from Bokaro steel plant dipped 4.9 percent. But revenues from Bhilai and Rourkela steel plants rose 6 percent and 2.7 percent, respectively.

Commenting on the results, Chairman Prakash said, “The Indian Steel Markets have remained quite robust showcasing continual growth in demand. SAIL has been taking various initiatives towards increasing volumes, adding value-added products to its product basket and improving efficiency levels which is reflected in the improved physical performance year on year.”

The board has recommended the Final Dividend Rs l/ per share for the year FY23-24, in addition to the interim dividend declared in February, the company said.

FY performance

Consolidated revenue from operations for the year remained flat at Rs 1.05 lakh crore but net profit surged 41 percent to Rs 3,066.67 crore.

On a standalone basis, earnings before interest, tax, depreciation
and amortisation (EBITDA) was Rs 12,280 crore up 30.9 per cent YOY.

SAIL posted over five percent increase in crude steel production to 19.2 million tonne for the financial year 2023-24. The crude steel production and sales volume have registered a growth of 5.2 percent and 5.1 percent respectively during FY’24 over corresponding period last year, the company said.

Plans to improve sub-grade fines

The government is working on a policy to encourage upgrading of low-grade iron ore, steel Secretary Nagendra Nath Sinha said on May 17. The move aims to maximise the use of ore with less iron content in steel production.

SAIL noted that there is significant market demand for sub-grade fines and that the recent sales price trends are indicative of considerable margins over and above the carrying value of such inventories. ” The management also has plans to set up a beneficiation plant in future that will consume significant volume of sub-grade fines annually,” the company said.

Beneficiation of lower-grade ore involves various processes to increase the iron content and reduce impurities, making it suitable for industrial use.