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NRI

Open DEMAT AND TRADING ACCOUNT WITH ICICIDIRECT

  • 07 Nov 2024
  • ICICI Securities

LOWER VOLUMES, REALISATION IMPACTED THE PROFITABILITY

News: Consolidated revenue declined by 21.6% YoY (-21.1% QoQ) to 1234.3 crores on account of decline in sales realisation by 13.6 % YoY (-3.2% QoQ) & decline in sales volumes by 9.3% YoY (-18.4% QoQ) to 2.5 million tonnes. Cost/ton declined by 7% YoY to Rs 4623/ton, mainly led by lower raw material & power & fuel cost per ton. Sequentially, cost/ton increased by 4.7%, led by negative operating leverage. EBITDA/ton declined by 54.7% YoY (-50.8% QoQ) to Rs 360/ton. Subsequently, EBITDA decreased by 58.9% YoY (-59.9% QoQ) to Rs 89.3 crores. PAT stood at a loss of Rs 19.2 crores in Q2FY25 vs profit of Rs 95.9 crores in Q2FY24. For 1HFY25, revenue is down by 15.3% YoY on lower volumes (-4.4% YoY) and lower realisations (-11.4% YoY). EBITDA/ton stood at Rs 565/ton (-21.1 % YoY) in 1HFY25.

Views: Operational performance was below expectations, mainly due to lower-than-expected volume & sales realisation. Going forward, we expect operational performance to improve, led by pickup in demand and prices along with continuous operational efficiency measures. Medium to longer term volume growth visibility remains strong led by aggressive capacity expansion plan of 7.5 mtpa (from 16.5 mtpa at present to reach 24 mtpa by FY27e and 33 mtpa by FY30e). EBITDA/ton is also expected to improve in 2HFY25e and FY26e, led by realisation improvement, continuous focus on cost saving measures & positive operating leverage.

Impact: Negative