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SAIL Q1 Review - Profitability Beat But Volumes Disappoint: IDBI Capital

SAIL Q1 Review - Profitability Beat But Volumes Disappoint: IDBI Capital

<div class="paragraphs"><p>A steel coil receives its number by a worker at the&nbsp;steel plant in Duisburg, Germany. (Source: Reuters/Wolfgang Rattay)</p></div>
A steel coil receives its number by a worker at the steel plant in Duisburg, Germany. (Source: Reuters/Wolfgang Rattay)

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.

IDBI Capital Report

Steel Authority of India Ltd.’s Q1 FY23 profitability was higher than our estimates. Its sales grew by 16% YoY to Rs 240 billion led by higher realisations even as sales volumes fell by 5% YoY to 3.15 million tonnes (lower than expected).

SAIL witnessed sharper fall in volumes due to imposition of export duty in May compared to its peers. Its Ebitda stood at Rs 23 billion (down 63% YoY, down 47% QoQ) versus our estimate of Rs 14 billion.

Ebitda/tonne fell 21% QoQ to Rs 7,304 mainly led by sharp rise in prices of coking coal. We have lowered our FY23/FY24 volumes forecasts by 5/7% but marginally increase our Ebitda estimates.

Click on the attachment to read the full report:

IDBI Capital SAIL Q1FY23 Result Update.pdf

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