{"id":156342,"date":"2023-11-16T11:44:25","date_gmt":"2023-11-16T16:44:25","guid":{"rendered":"https:\/\/44.250.171.167\/?p=156342"},"modified":"2023-11-16T11:44:26","modified_gmt":"2023-11-16T16:44:26","slug":"steel-authority-of-india-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/steel-authority-of-india-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Steel Authority of India Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Steel Authority of India Ltd (SAIL) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>SAIL registered best ever Q2 results in Q2 FY2024.<\/li>\n<li>Crude steel production grew 12% and saleable steel production grew 17% in Q2 FY24.<\/li>\n<li>Sales volume grew 13% domestically and total sales turnover grew 13% in Q2 FY24.<\/li>\n<li>SAIL returned to profitability with PBT of INR1696 crore and PAT of INR1,241 crore in Q2 FY2024.<\/li>\n<li>H1 FY2024 PBT grew over 250% vs last year to INR1898 crore.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Outlook<\/strong>\n<ul>\n<li>Coking coal prices expected to moderate in Q4 FY2024 providing cost relief.<\/li>\n<li>Domestic steel consumption outlook remains positive supporting better realizations.<\/li>\n<li>Expecting benefits from rail price revision to boost revenues and profits.<\/li>\n<li>Coking Coal Prices<\/li>\n<li>Expect Q3 imported coal prices to average around INR27,000\/tonne.<\/li>\n<li>Around 15% of coking coal sourced domestically from BCCL at 12-15% discount to import price.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Rail Price Revision Benefits<\/strong>\n<ul>\n<li>Booked INR1,750 crore in Q2 from FY22 rail price revision to INR85,300\/tonne.<\/li>\n<li>Currently getting provisional rail price of INR67,500\/tonne for FY23 and FY24.<\/li>\n<li>Will approach Railways for ad-hoc increase for FY23 and FY24 based on higher costs.<\/li>\n<li>Expect additional gains in coming quarters once final FY23 rail price is determined.<\/li>\n<li>Will submit FY23 costs to determine final rail price, expect it to exceed provisional price.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Semis Sales<\/strong>\n<ul>\n<li>Semis share of sales now less than 15%.<\/li>\n<li>Using external conversion services to convert semis to finished products.<\/li>\n<li>Reduced overall semis share to just 8% of sales.<\/li>\n<li>Conversion done mainly for long products like TMT bars and structures.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Sales Realizations<\/strong>\n<ul>\n<li>Q2 flat product realization around INR55,000\/tonne vs INR51,000 for long products.<\/li>\n<li>In October, flat realization was Rs 57,000\/tonne and long products Rs 54,000\/tonne.<\/li>\n<li>Current differential between flat and long products is Rs 3,000 &#8211; 4,000\/tonne.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capex and Expansion Plans<\/strong>\n<ul>\n<li>Will start with greenfield expansion of IISCO Steel Plant.<\/li>\n<li>Expect to get board approval for IISCO expansion by end of Q3FY24.<\/li>\n<li>Asset sweating capex of Rs 15,000-20,000 crores over 4-5 years.<\/li>\n<li>Will then go for brownfield expansions at Durgapur and Bokaro.<\/li>\n<li>Phasing expansions over 3-4 years to avoid liquidity crisis.<\/li>\n<li>Aim to maintain debt-equity ratio of 1:1 during expansion.<\/li>\n<li>Asset sweating to increase capacity by 3.5 million tonnes over next 3 years<\/li>\n<\/ul>\n<\/li>\n<li><strong>Production Enhancement<\/strong>\n<ul>\n<li>Plan to sweat existing assets through debottlenecking.<\/li>\n<li>Adding casters at Rourkela and Bhilai to increase capacity by 2 million tonnes.<\/li>\n<li>Also setting up TMT bar mill at Durgapur to improve product mix.<\/li>\n<li>Intermediate mining started at Rowghat, will help secure iron ore.<\/li>\n<li>Targeting 3-4 years to get sufficient iron ore material from Rowghat.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Volume Growth<\/strong>\n<ul>\n<li>Volume guidance for FY24 is 19 million tonnes of crude steel production.<\/li>\n<li>Debottlenecking to help increase capacity by 2 million tonnes.<\/li>\n<li>Debottlenecking to add 1 MT each in FY26 and FY27.<\/li>\n<li>Sweating of assets to further increase capacity by 3.5 million tonnes.<\/li>\n<li>Volume growth to come in phases starting FY25.<\/li>\n<li>FY24 target is 19 MT crude steel production and 18-18.5 MT sales.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Domestic Demand Trends<\/strong>\n<ul>\n<li>Seeing very good domestic demand, reduced inventory by 3 lakh tonnes since Q1.<\/li>\n<li>Import pressure building up especially for flat products.<\/li>\n<li>Overall imports still small compared to India&#8217;s steel production.<\/li>\n<li>Expect imports to have some impact but not major.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Steel Authority of India Ltd (SAIL) Q2 FY24 Earnings Concall Financial Performance SAIL registered best ever Q2 results in Q2 FY2024. Crude steel production grew 12% and saleable steel production grew 17% in Q2 FY24. Sales volume grew 13% domestically and total sales turnover grew 13% in Q2 FY24. SAIL returned to [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5753],"tags":[10169,9010],"class_list":["post-156342","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-industrials","tag-earnings","tag-steel-producer"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":155269,"url":"https:\/\/alphastreet.com\/india\/icici-bank-limited-q2-fy24-earnings-conference-call-insights\/","url_meta":{"origin":156342,"position":0},"title":"ICICI Bank Limited Q2 FY24 Earnings Conference Call Insights","author":"Praveen","date":"October 25, 2023","format":false,"excerpt":"Key highlights from ICICI Bank Limited (ICICIBANK) Q2 FY24 Earnings Concall Loan Growth And Credit Quality Domestic loan portfolio grew 19.3% year-on-year and 4.8% sequentially at September 30, 2023. 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