Steel Authority of India (SAIL) Q2 24/25 earnings summary

Executive summary

• H1 FY25 revenue from operations was INR 48,672 crore, with PAT at INR 844 crore and EBITDA at INR 5,593 crore, reflecting a year-over-year decline due to lower realizations, weak global demand, and increased imports, but sequential improvement was seen in Q2 FY25.

• Crude steel production for H1 FY25 was 9.457 million tons, with saleable steel sales volume at 8.108 million tons, and domestic sales dominating.

• The Indian economy remains resilient, with GDP growth for Q1 FY25 at 6.7% and projected to grow between 6.5% to 7.3% over the next two years, supporting steel demand.

• The company continues to focus on sustainability, decarbonisation, and social responsibility, achieving a 20% carbon footprint reduction in Phase I and targeting a further 12% reduction by 2030-31.

• Management expects improved performance in H2 FY25, citing anticipated reduction in steel imports and higher GDP and capital expenditure.

Financial highlights

• Turnover for H1 FY25 was INR 48,262 crore, down nearly 10% year-over-year, with EBITDA at INR 5,593 crore and PAT at INR 844 crore.

• Standalone Q2 FY25 revenue was INR 24,675 crore, net profit INR 834 crore, and EBITDA INR 3,174 crore, all showing sequential improvement.

• Debt (IndAS) stood at INR 41,250 crore with a debt-equity ratio of 0.76 as of 30 Sep 2024.

• Interest coverage ratio was 1.82 for H1 FY25; DSCR was 3.23.

• Borrowings at the end of Q2 FY25 stood at INR 35,596 crore, further reduced to INR 34,224 crore by end of October.

Outlook and guidance

• Management projects better results in H2 FY25, expecting a downtrend in steel imports and growth in GDP and capital expenditure to support performance.

• Projected full-year sales volume target is around 18 million tons.

• Debt reduction planned to INR 29,000-30,000 crore by year-end, contingent on market conditions.

• CapEx for FY25 is projected at around INR 6,000 crore, with higher expenditures expected from FY26 onward as major expansion projects commence.

• India is projected to lead global steel demand growth at 8% in 2024 and 8.5% in 2025.