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Published: May 21, 2024
Updated: May 21, 2024
The Steel Authority of India Ltd (SAIL) reported a nearly 3% decline in profit for the fourth quarter ending March 31, 2024. The state-owned company's consolidated net profit dropped to ₹1,126 crore from ₹1,159 crore in the same period the previous year.
SAIL's earnings were impacted by softer steel prices. The market has seen a downturn in steel prices, which has significantly affected the company's revenue. The decrease in steel prices is largely attributed to higher imports from China, which is selling finished steel products at lower prices amid its own economic struggles, including a weak property sector and elevated U.S. tariffs.
The company also faced higher input costs, which rose about 2% to ₹15,130 crore. The increase in the costs of key steel making ingredients, such as coking coal and iron ore, further pressured SAIL’s profit margins during the quarter.
SAIL is not alone in facing these challenges. The broader steel industry in India has been
experiencing similar pressures. For instance, JSW Steel recently reported a decline in
fourth-quarter profit as well. Both JSW Steel and Tata Steel are planning significant
investments to expand capacity, anticipating a rise in steel demand due to increased
government spending on infrastructure projects ahead of the ongoing national elections.
SAIL's fourth-quarter results reflect the current challenges in the steel industry, including
lower steel prices and rising production costs. Despite these hurdles, the industry's outlook
remains optimistic with anticipated growth in demand driven by government infrastructure
spending. Moving forward, the ability of steelmakers like SAIL to navigate these challenges
will be crucial for their financial performance and market position.
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