SAIL Q4 results preview: Profit may jump manifold sequentially; EBITDA per tonne likely to rise

State run metal company Steel Authority of India (SAIL) is set to announce its results for the period ended on March 31, 2023 on Thursday. The company is likely to report a strong performance on sequential basis (QoQ), while its year-on-year (YoY) performance may drop. SAIL is likely to report a manifold jump in its profit after tax (PAT) on a quarter-on-quarter (QoQ) basis on the back of higher volume realization and increased EBITDA per tonne for the January-March 2023 period. However, its net profit is seen eroding by half on yearly comparison, said analysts. Phillip Capital, which has a 'buy' rating on SAIL, is expecting volumes and realisations to increase by 12 per cent and 4 per cent QoQ respectively. Overall costs to be flattish. It also sees a meaningful increase in EBITDA. EBITDA per tonne is seen at Rs 7,891, rising 57.7 per cent QoQ but down 14.2 per cent sequentially. The brokerage sees revenue at Rs 28,225.2 crore, up 15 per cent QoQ but down 6 per cent YoY. EBITDA is likely to be at Rs 3,669.2 crore, rising 76.7 per cent QoQ but down 15.3 per cent YoY. SAIL may report a PAT of Rs 1,361.4 crore, up 454.1 per cent on a sequential basis. Nuvama Institutional Equities expects company's EBITDA per tonner to show an uptick of 41 per cent QoQ to Rs 7,053. The rise in EBITDA is largely attributed to the uptick in volumes, which is expected to increase by 16.5 per cent QoQ to 4.83mt and benefits of operating leverage. Additionally, realisation should increase by 3.6 pr cent QoQ to Rs 57,024 per tonne Nuvama sees SAIL's revenue at Rs 30,235.4 crore, flat YoY but up 20.7 per cent QoQ. EBITDA is seen at 3,409.4 crore, up 64.2 per cent QoQ but 21.3 per cent YoY. The metal play may report an adjusted net profit at Rs 1,187.4 crore, about half from previous year but more than 6 times against the preceding quarter. Shares of Steel Authority of India dropped about a per cent on Thursday as the stock traded at Rs 82.13 with a total market capitalization of less than Rs 34,000 crore. Shares of SAIL have gained about 15 per cent in the last one year, while it is down 45 per cent in the last two years. Reliance Securities expects SAIL to report a revenue of Rs 29,146.4 crore, dropping 5.2 per cent YoY but up 16.4 per cent QoQ, while its EBITDA is seen at Rs 3,855.3 crore, a fall of 11 per cent YoY but up 85.6 per cent QoQ, with EBITDA margin at 13.2 per cent, expanding 493 bps QoQ. PAT is seen at Rs 1,711.3 crore, dropping 29 per cent YoY but a surge of 597 per cent QoQ. "Steel sales volume is expected to increase 3 per cent YoY and 17 per cent QoQ due to stable demand. Realisation is expected to decrease by 4 per cent YoY, but improvement of 4 per cent QoQ EBITDA per tonne is expected to contract significantly on YoY basis but would improve QoQ, due to better pricing," it said. ICICI Securities expects SAIL to report sales volume of 4.7 million tonnes (MT), up 12 per cent QoQ. The topline is expected to come in at Rs 29,023 crore, up 16 per cent QoQ. EBITDA is likely to come in at Rs 3408 crore, up 64 per cent QoQ. EBITDA/tonne is likely to come in at Rs 7,250/tonne compared to Rs 5003/tonne in Q3FY23. Ensuing PAT is likely to come in at Rs 1281 crore. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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