The domestic steel industry continues to experience steady growth, buoyed by the government’s ongoing investments in infrastructure. This trend has set a positive tone for the sector, with further expansion anticipated. The Steel Authority of India Limited (SAIL), one of the country’s leading steel producers, recently announced its financial performance for the first quarter of the fiscal year 2024-2025, ending on June 30, 2024.
SAIL’s performance for the first quarter of FY’25 reveals a mixed bag of outcomes, reflecting both the resilience of its operations and the challenges faced by the broader steel industry. The company’s crude steel production for Q1 FY’25 stood at 4.68 million tonnes, marginally higher than the 4.67 million tonnes recorded in Q1 FY’24, though slightly below the 5.02 million tonnes achieved in Q4 FY’24. This consistent production level demonstrates SAIL’s ability to maintain a steady output despite fluctuating market conditions.
The sales volume for Q1 FY’25 reached 4.01 million tonnes, a notable improvement from the 3.88 million tonnes sold in Q1 FY’24, yet a decrease from the 4.56 million tonnes recorded in the previous quarter. This reflects the ongoing demand for steel in the domestic market, driven by both traditional sectors such as construction and emerging industries.
In terms of financial performance, SAIL’s revenue from operations for Q1 FY’25 amounted to Rs. 23,998 crore, slightly down from Rs 24,358 crore in Q1 FY’24 and Rs 27,958 crore in Q4 FY’24. The reduction in revenue can be attributed to a decline in Net Sales Realization (NSR) within the domestic market, largely due to the influx of cheaper steel imports, which have exerted downward pressure on prices.
Despite these challenges, SAIL’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for Q1 FY’25 demonstrated a solid growth trajectory. The company reported an EBITDA of Rs 2,420 crore, marking an over 15% increase compared to Rs. 2,090 crore in Q1 FY’24, although this was lower than the Rs. 3,829 crore achieved in Q4 FY’24. This growth underscores the company’s robust core performance, highlighting its ability to generate consistent earnings despite external pressures.
However, the company’s profitability was impacted by several factors during the quarter. The Profit Before Tax (PBT) for Q1 FY’25 was significantly lower, at Rs 14 crore, compared to Rs 202 crore in Q1 FY’24 and Rs. 1,329 crore in Q4 FY’24. This decline was primarily due to the reduction in NSR, coupled with adjustments related to exceptional items. These exceptional items, which amounted to Rs 312 crore in Q1 FY’25, further eroded the company’s profit margins.
As a result, the Profit After Tax (PAT) for the quarter was a modest Rs 11 crore, down from Rs 150 crore in Q1 FY’24 and RsSteel Authority of India Limited (SAIL) is one of the largest steel-making companies in India and a key player in the global steel industry. With an integrated business model, SAIL produces a wide range of steel products across various sectors. The company is recognized for its operational excellence, extensive product portfolio, and significant contribution to India’s infrastructure development. 1,011 crore in Q4 FY’24.
Reflecting on the company’s performance for the quarter, Amarendu Prakash, Chairman of SAIL, expressed confidence in the future growth of the domestic steel industry. He noted that the steady increase in domestic steel consumption is being driven by a combination of traditional sectors, such as construction and manufacturing, and emerging sectors, which are beginning to play a more significant role in the market.
Prakash highlighted the positive impact of government investments in infrastructure, as outlined in the recent budget, which are expected to further stimulate growth in the steel sector. He also emphasized SAIL’s commitment to scaling up its production volumes in response to this anticipated demand.
However, Prakash acknowledged the challenges posed by the influx of cheaper steel imports, which have put pressure on domestic prices. He assured stakeholders that SAIL is aware of these challenges and is taking steps to address them appropriately in the coming months.
Steel Authority of India Limited (SAIL) is one of the largest steel-making companies in India and a key player in the global steel industry. With an integrated business model, SAIL produces a wide range of steel products across various sectors. The company is recognized for its operational excellence, extensive product portfolio, and significant contribution to India’s infrastructure development.
