SAIL Q4 Results Review - Lower NSR, High Input Costs Affected Margins: Prabhudas Lilladher

Prabhudas Lilladher Report

Steel Authority of India Ltd. reported in-line operating performance in Q4 affected by sharp 5.1% QoQ decline in net sales realisation to Rs 58,162 (our estimate: Rs 59,000) and sequential increase in coking coal prices.

Ebitda per ton of Rs 4,472 was in-line with our estimate of Rs 4,385 post adjusting for Rs 14.4 billion towards upward revision of provisional railway contract prices for earlier quarters.

Going forward, there is expectation of $30/tonne decline in cost of coking coal in Q1 while FY25 sales guidance of ~19 million tonne was given. Steel prices declined sharply in April and then improved which may keep Q1 NSR flattish sequentially.

SAIL has planned to increase its capacity from ~20.2 mtpa to 35 mtpa by FY32 in phases, yet, in the near term no significant capacity addition is envisaged till FY27E.

SAIL has ~1.5 mt of finished goods inventory and enough capacity to cater to strong demand till FY26E.

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