SAIL's Q3 Profit Declines Amid Market Challenges, Yet Revenue Sees Uptick

In the third quarter of the fiscal year 2024-2025, the Steel Authority of India Limited (SAIL) experienced a significant decrease in its consolidated net profit, which fell by 66% to ₹142 crore, compared to ₹422 crore in the same period the previous year. This decline occurred despite a 5% increase in revenue from operations, which reached ₹24,490 crore, up from ₹23,349 crore in the corresponding quarter of the prior fiscal year. The reduction in profit is primarily attributed to increased expenses, which rose to ₹24,560 crore from ₹23,141 crore in the year-ago period. These expenses encompass various operational costs, including the consumption of raw materials, employee benefits, and finance costs. Despite the decline in profit, SAIL reported a slight improvement in its Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA), which stood at ₹2,389 crore, up from ₹2,319 crore in the same quarter the previous year. This indicates a modest enhancement in the company's core operational performance. In terms of production, SAIL's crude steel output for the quarter was 4.63 million tonnes, a slight decrease from 4.75 million tonnes in the same period last year. However, sales volume increased to 4.43 million tonnes from 3.81 million tonnes in the corresponding quarter of the previous fiscal year. The company's financial performance was adversely affected by a combination of factors, including weaker domestic demand and subdued steel prices, which were influenced by an influx of cheaper imports. These market conditions have posed significant challenges for SAIL and other Indian steelmakers. Despite these hurdles, SAIL's shares saw a positive movement, rising by 3.5% to ₹103.65 on the Bombay Stock Exchange following the announcement of the Q3 results. This suggests that investors may have confidence in the company's strategic direction and future prospects. Looking ahead, SAIL's Chairman, Amarendu Prakash, expressed optimism about the company's future performance. He emphasized the company's commitment to increasing production and improving cost efficiency. Prakash also highlighted the expectation that challenges posed by cheap imports will be addressed and that government initiatives in infrastructure development will further stimulate domestic steel demand. In summary, while SAIL faced a notable decline in net profit during the third quarter, the company achieved growth in revenue and maintained a stable operational performance. The management remains focused on navigating market challenges and is optimistic about leveraging future opportunities to enhance the company's performance.