SAIL Q2 Results Review - High Coking Coal Costs Dent Profitability: IDBI Capital
Sharp rise in raw material cost (mainly coking coal price) led to fall in Ebitda to Rs 7 billion versus our estimate of Rs 28 bn.
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IDBI Capital Report
Steel Authority of India Ltd.’s Q2 FY23 profitability was weaker than our estimates. Its sales grew by 2% YoY to Rs 262 billion.
Realisations were weak even as sales volume declined 2% YoY to 4.21 million tonnes.
Further sharp rise in raw material cost (mainly coking coal price) led to fall in Ebitda to Rs 7 billion (down 90% YoY, down 68% QoQ) versus our estimate of Rs 28 billion.
SAIL's Ebitda/tonne fell 76% QoQ to Rs 1,740. We have lowered our FY23 Ebitda forecast by 21% given weaker than expected Q2 FY23 profitability. Nevertheless, we broadly maintain our FY24 forecasts.
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