SAIL Q2 Results Review - Rails Price Revision Lead To Earnings Beat; Higher Volume Outlook: Systematix

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Steel Authority of India Ltd.’s Q2 FY24 consolidated Ebitda at Rs 38.7 billion (+427% YoY) versus Ebitda loss of Rs 27.6 billion in the previous quarter was 93% above our estimate. The earnings beat was largely due to Rs 17.5 billion benefit relating to a revision in provisional rail prices for FY22. Ebitda adjusted for this benefit was Rs 21.2 billion versus our estimate of Rs 20 billion. Ebitda/tonne came in at $98/tonne +347% YoY/-87/tonne in Q1 FY24. Steel production rose by 17%/9% YoY/QoQ to 4.8 million tonne and saleable steel sales also came in at 4.8 million tonne (+14% YoY and +24% QoQ), 2% above our estimates. Steel net sales realisation at Rs 61,900/tonne (-1% YoY, -1% QoQ) was 2% above our estimate. Net debt was lower by Rs 48 billion QoQ and Rs 4 billion lower than the March 2023 level. Focus to remain on deleveraging as major growth capex plans are likely to materialise beyond FY26. H1 FY24 capex was ~Rs 20 billion largely towards maintenance activities, a consistent number in the absence of growth capex after recently concluding a decade-long capex cycle. Capacity expansion plans beyond the current 19.1 million tonne are currently on the chalkboard and a gradual increase can be expected over the next two years largely through debottlenecking and technological modernisation of existing plants improving operational efficiency..Click on the attachment to read the full report:.SAIL Q2 Review - Net Debt Declines Further; Limited Deleveraging Ahead With Capex Lined Up: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

SAIL Q2 Results Review - Rails Price Revision Lead To Earnings Beat; Higher Volume Outlook: Systematix

The company is targeting 19 million tonne (+17% YoY) of steel sales volumes in FY24.

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