SAIL shares plunged 4% in early trading on Friday and reached a low of Rs 115 on the BSE (Bombay Stock Exchange) after it reported weaker-than-expected Q2 FY25 results on Thursday.
By 9:45 AM, the stock was down nearly 4% at Rs 117.80. In comparison, the BSE Sensex saw a smaller decline of 0.22%. SAIL’s market capitalization stood at Rs 49,127.45 crore, with a 52-week range between Rs 85.31 and Rs 175.65.
Earnings Decline and Revenue Contraction
For the quarter ending September 2024, SAIL reported a 31% year-on-year drop in consolidated net profit to Rs 897.15 crore from Rs 1,305.59 crore. The revenue also declined by 17% to Rs 24,675 crore, down from Rs 29,714 crore in the previous year. Total income fell to Rs 24,842.18 crore, with expenses slightly decreasing to Rs 23,824.07 crore.
Operational Performance and Margin Contraction
SAIL’s crude steel output was stable at 4.76 million tonnes (MT) compared to the previous year, but sales volume dropped to 4.10 MT from 4.77 MT. EBITDA declined by 25% to Rs 2,904 crore, with EBITDA margins contracting by 120 basis points to 11.8% from the previous year’s 13%.
Outlook for H2 FY25
Despite the challenging quarter, SAIL Chairman Amarendu Prakash is optimistic about the second half of FY25, anticipating an improvement driven by GDP growth, a decrease in steel imports, and capital expenditure increases. “We expect H2 FY25 to bring more promising results compared to H1 FY25, which was impacted by various challenges,” Prakash said.
Set up in 1954, SAIL operates under India’s Ministry of Steel and is one of the country’s largest state-owned steel producers. It holds a significant position in both the Indian and global steel markets. Over the past year, SAIL shares have outperformed the Sensex with a rise of 43.4% compared to the index’s 22.4% gain.
