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Systematix Research Report
Steel Authority of India Ltd.’s adjusted Q4 FY21 consolidated Ebitda of Rs 72.7 billion (up 180% YoY, up 69% QoQ) was 23% above our estimates.
Earnings were largely driven by a 40% YoY (Rs 15.6 kilo/tonne) and 14% QoQ (Rs 6.7 kilo/tonne) surge in realisations and benign raw material costs.
As a result, Ebitda margins increased to $233/tonne (highest since Q2 FY09).
We expect the strong earnings momentum to flow through in H1 FY22 helped continued pricing buoyancy.
Debt reduction has accelerated sharply in the wake of elevated cash generation and reduced capex.
We raise FY22E/23E Ebitda by 117%/49% as we increase our steel price assumptions.
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