Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales volume increased by 4% quarter-on-quarter and 14% year-on-year, reaching 2.09 million tonnes.
- Adjusted EBITDA for Q1 FY25 was INR 2,831 crores, a 13% increase quarter-on-quarter.
- PAT surged by 43% quarter-on-quarter to INR 1,338 crores due to higher EBITDA and lower subsidiary losses.
- Consolidated net debt decreased to INR 10,462 crores from INR 11,203 crores in the previous quarter.
- The company is on track with its 6 million MTPA expansion project, targeting completion of major facilities by Q4 FY25.
Negative Points
- Slight softening of NSR by 1% expected in Q2 FY25.
- Delays in project completion timelines, with some facilities now expected to be completed a couple of quarters later than initially planned.
- Challenges faced due to general elections and unprecedented heat waves in Odisha, causing workforce demobilization.
- Issues with RINL affecting the supply of pellets, impacting production volumes.
- Uncertainty in the market leading to a cautious approach in providing future volume guidance.
Q & A Highlights
Q: Can you provide an update on the project completion status, particularly for BOF2, BF2, and the coal mine materialization?
A: We are targeting to complete BOF2 and BF2 by March '25. The delays were due to general elections and an unprecedented heat wave in Odisha. For coal mines, Utkal C has started, and we have approvals for Utkal B1, which will start soon.
Q: What is the incremental volume from the hot strip mill (HSM) in Q1 FY25?
A: The HSM volume doubled from Q4 FY24 to Q1 FY25, reaching around 450 kt. This rapid ramp-up is expected to continue as new facilities come online.
Q: Can you provide a volume guidance for FY25 given the project timelines?
A: We are confident about completing the major facilities by March '25. However, we will provide a more precise volume guidance closer to the commissioning timelines.
Q: What is the status of Utkal B1 and B2 coal mines and the expected cost and price movements for Q2?
A: Utkal B1 is expected to start in the next two months. We anticipate a $30 to $35 per tonne reduction in coking coal prices in Q2, along with a slight reduction in iron ore prices.
Q: Can you maintain a 2 million tonnes per quarter run rate despite the RINL issues?
A: Yes, we are confident in maintaining the 2 million tonnes per quarter run rate. The RINL issues are being addressed, and we expect to resume stable supplies soon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
