SAIL’s Q4 Net Profit Falls 3% to Rs 1,126 Crore Due to Declining Steel Prices

Steel Authority of India Ltd (SAIL) saw a nearly three percent year-on-year decrease in consolidated net profit, falling to Rs 1,125.7 crore for the March quarter of the financial year 2023-24. The decline resulted from weaker domestic steel prices due to increased competition from China.

SAIL’s consolidated revenue from operations dropped by four percent from the previous year, totaling Rs 27,958.52 crore, as announced on May 20. On a standalone basis, net profit fell to Rs 1,011.2 crore from Rs 1,049.02 crore in the same quarter last year.

Indian steelmakers have faced challenges due to a surge in low-cost finished steel imports from China, which is struggling with a weak property sector and high US tariffs. SAIL Chairman Amarendu Prakash mentioned the company is closely monitoring Chinese imports following the US tariff increase.

Revenues from SAIL’s Salem Steel Plant fell by 10 percent to Rs 622.28 crore, and Bokaro Steel Plant saw a 4.9 percent dip. However, Bhilai and Rourkela Steel Plants experienced revenue growth of 6 percent and 2.7 percent, respectively. Chairman Prakash commented, “The Indian steel market has shown robust growth in demand. SAIL is increasing volumes, adding value-added products, and improving efficiency, which is reflected in the improved performance year on year.”

SAIL’s board recommended a final dividend of Rs 1 per share for FY23-24, in addition to the interim dividend declared in February. For the year, consolidated revenue from operations remained flat at Rs 1.05 lakh crore, but net profit surged 41 percent to Rs 3,066.67 crore. On a standalone basis, EBITDA rose 30.9 percent year-on-year to Rs 12,280 crore.

SAIL posted over a five percent increase in crude steel production, reaching 19.2 million tonnes for FY 2023-24. Crude steel production and sales volume grew by 5.2 percent and 5.1 percent, respectively, over the previous year.

Plans to Improve Sub-Grade Fines

On May 17, Steel Secretary Nagendra Nath Sinha announced the government’s work on a policy to encourage upgrading low-grade iron ore to maximize its use in steel production. SAIL noted significant market demand for sub-grade fines and pointed out favorable recent sales price trends. The company plans to establish a beneficiation plant to process substantial volumes of sub-grade fines annually. Beneficiation involves processes to increase iron content and reduce impurities, making the ore suitable for industrial use.