SAIL Management Meet Takeaways - Near-Term Margin Pressures Priced In: Systematix
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Systematix Research Report
We met with the management of Steel Authority of India Ltd. to gain insights into its growth strategy and mid-term guidance.
The company is undertaking a feasibility study to finalise an extensive capex plan to achieve a production capacity of 50 million tonne per annum by FY26 from 20 mtpa currently. The expansion would be entirely brownfield in nature and would largely comprise new blast furnaces with ~5mtpa capacity.
With continued deleveraging, we expect SAIL to become debt free by FY23.
Lower steel prices and high coking coal prices during the current quarter are likely to put downward pressure on H2 FY22 earnings.
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