Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sarda Energy & Minerals Ltd (BOM:504614, Financial) achieved consolidated quarterly revenue of INR926 crores in Q1 FY25, up from INR889 crores in the previous quarter.
- Consolidated profit after tax increased to INR199 crores, significantly higher than INR88 crores last quarter and INR172 crores in Q1 FY24.
- The company is net debt-free with strong liquidity, holding cash and liquid investments of around INR1,300 crores as of June 30.
- The 25-megawatt Rehar hydropower project is nearing completion and is expected to be commissioned by the end of this quarter.
- Work on the 50-megawatt captive solar power project is progressing as scheduled, with the plant expected to be operational by the end of the current financial year.
Negative Points
- Hydropower generation decreased by 13% due to delayed launches.
- Steel prices have been negatively impacted by increased exports from China due to subdued domestic demand.
- The company experienced a 6% to 8% decline in steel product prices from June, affecting overall revenue.
- There has been no material correction in raw material prices, which could impact future profitability.
- The company faces delays in obtaining necessary clearances for coal mining projects, which could affect future production timelines.
Q & A Highlights
Highlights of Sarda Energy & Minerals Ltd (BOM:504614) Q1 FY25 Earnings Call
Q: Sir, you mentioned that the prices have started to decline from June. Just wanted to understand what are the current prices with respect to 1Q averages? How much it is down?
A: The prices have corrected by around 6% to 8% as compared to the first-quarter average. - Padam Jain, CFO
Q: Correspondingly, the cost of production, any guidance in terms of production in the cost of product numbers? The coal, iron ore cost for you?
A: There has not been any material correction in the raw material prices when you compare with the Q1 average. - Padam Jain, CFO
Q: We have spent INR150 crore in 1Q. I wanted to understand the overall FY25 CapEx, how much is left for spending?
A: The total CapEx should be somewhere in the range of INR700 crores, out of which we have already spent about INR150 crores in the first quarter. - Padam Jain, CFO
Q: Regarding our Raipur captive power plant, it's been shut down last quarter. When do you expect reproduction in both units?
A: The Raipur captive power plant has restarted after statutory overhauling. The 25-megawatt Rehar hydro project will be commissioned in this quarter. - Pankaj Sarda, Joint Managing Director
Q: Do you see more margin improvement in coming quarters?
A: It depends on market conditions. Presently, margins are on the lower side compared to the first quarter, but it depends on how the market evolves post-rainy season. - Padam Jain, CFO
Q: We see a slight drop in pellet, billet, and wire rod volume numbers. Is this due to demand or Chinese import?
A: The production of billet was intentionally curtailed to supply power on the IEX where we were getting better margins. - Padam Jain, CFO
Q: Can you give some detail about the use of power project SKS?
A: The matter is held by NCLT after revert from NCLAT, and everyone is awaiting the orders. - Padam Jain, CFO
Q: How do you foresee the second half of FY25?
A: Operational performance will remain at normal levels throughout the year. Pricing is volatile and depends on multiple factors including geopolitical conditions and interest rates. - Padam Jain, CFO
Q: Do we see further profitability improvement even though the situation persists under current levels?
A: There will be additions from the increase in coal mining capacity and the commissioning of our hydropower projects. - Padam Jain, CFO
Q: Post-elections, how are you seeing the operations level, especially on the labor side?
A: We are operating at normal levels. - Padam Jain, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
