The shares of the largest steel manufacturer dipped 7 percent in today’s trading session after the company’s net profit and revenue 31 percent and 17 percent YoY, respectively in Q2FY25.
With a market capitalization of Rs 49,148.10 crore, the shares of Steel Authority of India Ltd (NS:SAIL) were trading at Rs 119.45 per share, decreasing around 3.42 percent as compared to the previous closing price of Rs 123.30 apiece.
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Reason for rise:-
The shares of the company have seen a bearish movement after Steel Authority of India Ltd announced its financial performance in which revenue plummeted by 17.8 percent on a yearly basis from Rs 29,712 crore in Q2FY24 to Rs 24,675 crore in Q2FY25, however, on a Quarterly basis revenue zoomed by 2.8 percent from Rs 23,998 crore in Q1FY25 to Rs 24,675 crore in Q2Y25.
Moreover, net profit fell drastically by 31 percent on a yearly basis from Rs 1,306 crore in Q2FY24 to Rs 897 crore in Q2FY25, meanwhile on a quarter-on-quarter basis net profit magnified multifold times by 993 percent from Rs 82 crore in Q1FY25 to Rs 897 crore in Q2FY25.
Capex & expansion plan:-
The company has set a Capex guidance of ₹6,300 crore for FY ’25, increasing to around ₹7,000 crore in subsequent years. Major expansions include a ₹37,000 crore, 4-million-ton IISCO plant and brownfield expansions at Bokaro and Durgapur, adding 3 million tons over 3–4 years.
Future Outlook:-
The company has a positive outlook on domestic steel demand, driven by government infrastructure spending. Management anticipates margin improvement with an expected recovery in realizations. For FY ’25, the crude steel production target is 20.87 million tons, with a sales volume goal of 19.26 million tons.
Market Outlook:-
Global economic conditions are challenged by inflation, monetary tightening, and geopolitical issues. While the IMF forecasts global growth at 3.2% for 2024 and 3.3% for 2025, India’s economy is more resilient, with growth estimates revised to 8.2% for FY ’24.
Indian steel remains a strong demand driver, expected to grow over 8% in the near term. Globally, steel demand is mixed; China’s demand is set to decline by around 1% in 2025, while EU demand, after a 10% dip YoY, should rebound by 2.9% in 2024.
Company filing:-
Steel Authority of India Limited is an India-based company that is engaged primarily in steel manufacturing business. The Company is engaged in the manufacturing and sale of iron and steel products. The Company’s business segments include five integrated steel plants and three alloy steel plants.
Written by:- Abhishek Singh
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