PSU steel-maker SAIL saw a 79 per cent fall in its consolidated net profit to ₹805 crore for the quarter ended June 30, 2022, dragged down by an increase in expenses. The net profit was ₹3,897 crore in the April-June period of 2021-22 fiscal, Steel Authority of India Limited (SAIL) said in a regulatory filing.

The company’s total income rose to ₹24,200 crore, 17 per cent y-o-y. Total income in the comparable period last fiscal was ₹20,755 crore. Expenses grew by nearly 50 per cent, y-o-y, to ₹23,295 crore. “The first quarter of FY23 saw twin challenges of higher input costs and subdued market demand, both globally and in the domestic arena, impacting the performance of the company,” it said in a statement.

Cost of production

High cost of production due to an increase in imported coking coal prices had an impact on the bottom line, it further explained, adding that the decline in global demand and steel prices “had a direct bearing on the domestic market and price realisation”.

Since peaking in April 2022, the price for steel has continuously remained under pressure during the quarter. “Construction and infrastructure projects have gained momentum which will boost the demand for steel products,” it said in the statement.

For Q1FY23, the crude steel production was 4.3 million tonnes, up 15 per cent over the same period last fiscal. On the other hand, sales volume fell by around 5 per cent, y-o-y, to 3.15 million tonne for the period under review.

The SAIL management said they were confident of improved performances in the second half of the fiscal as there has been a significant reduction in the price of imported coal and “ an uptick in demand” for steel.