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ICICI Securities Report
Q4 FY23 saw profitability improving across companies mainly led by higher realisation and lower cost. Key highlights:
Realisation for ferrous companies rose by Rs 1,500- 2,000/tonne on average;
coking coal cost was down by $8-10/tonne for all ferrous companies except Steel Authority of India Ltd.;
lower thermal coal cost aided profitability improvement for non-ferrous companies;
muted volume growth YoY (except JSW Steel Ltd.); and
debt reduction for companies.
Going ahead, we believe volume for ferrous companies is likely to be subdued as both domestic demand and export opportunities remain subdued.
On realisation front, there could be some benefit owing to contract prices, though spot prices are likely to stay flat. In case of non-ferrous companies, adverse impact of lower London Metal Exchange prices may be partially offset by lower coal cost.
Post Q4 earnings, street has raised Ebitda estimates of Jindal Stainless Ltd. and National Aluminium Company Ltd., but lowered them for SAIL and Jindal Steel and Power Ltd.
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