State-run Steel Authority of India (SAIL) on Wednesday reported an 80% decline in Q1FY23 net profit, on a standalone basis, at Rs 776 crore on higher input costs and lower realisation. During the same quarter last fiscal, SAIL reported a Rs 3,850 crore net profit.
While sales volume declined marginally to 3.15 million tonne (MT) during Q1 of the current fiscal compared to 3.33 MT a year earlier — its earnings before interest tax depreciation and amortisation (Ebitda) fell to Rs 2,606 crore compared to Rs 6,674 crore a year earlier. Revenue was at Rs 24,029 crore, up 16% year-on-year (y-o-y).
“The first quarter of FY23 saw twin challenges of higher input costs and subdued market demand, both global and domestic, impacting the performance of the company. High cost of production due to increase in imported coking coal prices had an impact on the bottom line,” SAIL said in a statement.
“The decline in global demand and prices for steel had a direct bearing on the domestic market and price realisation. Since peaking on April 22, the prices for steel have continuously remained under pressure during the quarter,” it said.
SAIL, however, said construction and infrastructure projects have gained momentum which will boost the demand for steel products. It is confident of improved performances in the second half of the current financial year with a significant reduction in prices of imported coal and an uptick in demand.