IDBI Capital: SAIL’s Profitability Weaker Than Expected In Q2, Net Debt Falls

While Steel Authority of India’s sales rose 34% YoY to 4.2 million tonne in Q2 FY21, its ebitda/tonne at Rs 4,518 missed estimates

An employee directs a colleague, top right, moving rolls of steel with a crane at the Steel Authority of India Ltd. (SAIL) Rourkela Steel Plant (RSP) in , Odisha, India (Photographer Dhiraj Singh/Bloomberg)

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IDBI Capital Report

Steel Authority of India Ltd.’s Q2 FY21 sales volumes at 4.2 million tonne (up 34% YoY) were slightly ahead of our forecast; however, its ebitda/tonne at Rs 4,518 was weaker than expected as realization fell 10% YoY to Rs 40,237 due to higher exports.

Its net sales grew 20% YoY to Rs 169 billion and Ebitda improved sharply by 64% YoY at Rs 19 billion led by higher volumes.

Interest cost decreased by 23% YoY to Rs 7,204 million as debt fell to Rs 482 billion by H1 FY21 from Rs 510 billion as of FY20.

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IDBI Capital SAIL Q2FY21 Result Update.pdf
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