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Yes Securities Report
Steel Authority of India Ltd.'s Q3 FY24 earnings were below the consensus estimates, majorly on the back of falling realisations and lower sales volumes.
The realisations took a major hit sequentially even though the steel price fall was lesser.
The realisations came in at Rs 56,262/tonne versus Rs 62,290/tonne in Q2 FY24 reporting a nearly 10% fall on a QoQ basis thereby hurting the company's return profile.
We see that going into Q4 FY24, SAIL's earnings, majorly will face more headwinds due to the rising coking coal prices and the steel prices still being under pressure.
Additionally, the Chinese steel imports are still a cause of worry for the Indian steel market. On the capex front, the management has provided a guidance of incurring Rs 5,500 crores of capex for this year which includes Rs 2,000 – 2,500 crores of maintenance capex and the remaining for expansion projects and debottlenecking at the current capacities.
Additionally, the target capex for FY2025E would be Rs. 6,000 crores.
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