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Centrum Broking Report
Steel Authority of India Ltd. reported better-than-expected Ebitda of Rs 43.3 billion (our estimate: Rs 39.3 billion), up 27% QoQ. The 10% beat in Ebitda was due to lower other expenses which includes one-off write back of excess liabilities of ~Rs 1.86 billion during the quarter.
Even after adjusting that, numbers were better than expected.
Reported Ebitda/tonne at Rs 9,196, was up Rs 315/tonne QoQ (our estimate: Rs 8,279).
The effect of higher coking coal prices were more than offset by lower employee and other expenses as well as higher volumes. Moreover, the continuous release of working capital helped SAIL to reduce debt further by Rs 38.6 billion QoQ to Rs 172.8 billion.
We believe there is less room for SAIL to deleverage further in FY23 due to expectation of lower operating cashflows and increase in capex.
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