SAIL Net Profit Plunges 62% in Q1, Hit by Weak Demand and High Costs
Q1 Performance
Steel Authority of India Limited (SAIL) has reported a sharp decline in its consolidated net profit for the first quarter (Q1) of the current financial year (FY). The company's net profit fell by 62% to Rs. 8178 crore, compared to Rs. 21649 crore in Q1 of the previous fiscal year.
Factors Contributing to the Decline
The drop in profits was primarily attributed to weak domestic demand for steel, coupled with higher input costs. The ongoing COVID-19 pandemic has also adversely impacted the industry, leading to supply chain disruptions and lower demand from key sectors such as construction and automotive.
Key Highlights
- SAIL's total income for Q1 FY23 stood at Rs. 27272 crore, down from Rs. 28914 crore in Q1 FY22.
- The company's production volume declined by 5% to 4.49 million tonnes in Q1 FY23.
- SAIL's exports increased by 23% to 1.05 million tonnes during the quarter.
Outlook
SAIL remains cautiously optimistic about the outlook for the steel sector in the coming quarters. The company expects a gradual recovery in domestic demand, supported by government infrastructure spending and a pickup in manufacturing activities. However, challenges such as high input costs and global economic uncertainty may continue to weigh on profitability.
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