Summary

  • Steel Authority of India Limited (NSE:SAIL) is one of the largest steel-making companies in India and one of the Maharatnas of the country’s Central Public Sector Enterprises.
  • SAIL produces iron and steel at five integrated plants and three special steel plants.

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Company Overview

Steel Authority of India Limited (NSE:SAIL) is one of the largest steel-making companies in India and one of the Maharatnas of the country’s Central Public Sector Enterprises.1

SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials. SAIL manufactures and sells a broad range of steel products

The Government of India owns about 65% of SAIL's equity and retains voting control of the Company.

The company has strategically located integrated operations with access to resource base including large landbank, captive mines and has diversified product mix supported by strong marketing and distribution network.

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Plants Locations

Integrated Steel PlantsLocationProducts
Bhilai Steel PlantChhattisgarhRails (13/26m), Long Rails, (65-260m), Blooms, Billets, Slabs, Channels, Joists, Angles, TMT Rebars, Wire Rods, Crane Rails, Plates, Pig iron & Coal Chemicals
Durgapur Steel PlantWest BengalBlooms, Billets, Joists, Narrow Slabs, Channels, Angles, TMT Rebars, Wheels & Axles, Pig iron & Coal Chemicals
Rourkela Steel PlantOdishaPlate Mill Plates, HR Plates, HR Coils, Slabs, CR Sheet/ Coil, Galvanised Sheets (plain & Corrugated), ERW Pipes, Spiral Weld pipes, CRNO, Pig iron & Coal Chemicals
Bokaro Steel PlantJharkhandHr Coils, Slabs, HR Sheets. Plates, CR Coils. Sheets, GP Sheets. coils, GC Sheets, Galvanealed Steel, HRPO, Pig iron & Coal Chemicals
IISCO Steel PlantWest BengalWire rods, Bars & Rebars, Joists, Channels, Angles, Blooms, Billets, Universal & Special section (Z-bar, MS Arch), Pig iron & Coal Chemicals
Special Steel PlantsLocationProducts
Salem Steel PlantTamil NaduCold Rolled Stainless Steel, Hot Rolled Carbon & Stainless Steel Products, Micro-Alloyed Carbon Steel
Alloy Steels PlantWest BengalAlloy Steel Squares & Rounds, Wear Resistant Plates, Forgings, Carne Wheels, Forged Rolls/ Plaets, Special Quality Slabs & Stainless Setel Slabs (low Ni, 300 & 400 series)
Visvesvaraya Iron & Steel PlantKarnatakaHigh Quality Rolled & Forged Alloy & Special Steel Products
Ferro Alloy PlantLocationProducts
Chandrapur Ferro Alloy PlantMaharashtraHigh/ Medium/ Low carbon Ferro-Manganese, Silico-Manganese

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Products

With an unmatched range of mild steel, both in long and flat categories, as well as a wide variety of special and stainless steels. Identify steel that meets your requirements in these pages. Require an unusual product or an altogether new product? SAIL delivers customized steel. A nation-wide spread of Sales offices, Warehouses, Dealers and a team of seasoned Application Engineers ensure swift and satisfactory fulfillment of steel requirement in any corner of the country at any time.2

  • Structurals
  • TMT
  • Galvanised Products
  • Bars & Wire Rods
  • Plates
  • Railway Products
  • Wheels and Axles
  • Hot Rolled Products
  • Cold Rolled Products
  • Pipes
  • Electrical Steels
  • Stainless Steel Products
  • Semis
  • Pig Iron
  • SAIL Nex
  • SAIL SeQR TMT Bars

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Industry Overview

World Steel

In the short range outlook released by World Steel Association in April, 2021 for 2021 and 2022, it forecast that steel demand will grow by 5.8% in 2021 to reach 1,864 Million Tonnes (MT), after declining by 0.2% in 2020. In 2022, steel demand will see further growth of 2.7% to reach 1,924.6 MT. The forecast also added that the second or third waves of infections will stabilise in the second quarter and that steady progress on vaccinations will be made, allowing a gradual return to normality in major steel-using countries. Despite the devastating impacts of Covid-19 pandemic, the steel industry was fortunate and passed the year 2020 with limited contraction as opposed to various other industries. Asia accounted for 1374.9 MT of Crude Steel production in 2020, an increase of 1.5% compared to 2019. China continued to dominate World Crude Steel production with an output of 1064.8 MT, with a growth of 7% over 2019.3

India’s Crude Steel production in 2020 declined by 10% over 2019 and stood at 100.3 MT. Japan produced 83.2 MT in 2020, a decline of 16.2% compared to 2019. South Korea’s Output of Crude Steel stood at 67.1 MT in 2020, lower by 6% over 2019. EU saw a reduction in Crude Steel output by 11.6% to 139.1 MT in 2020 over 2019. Germany produced 35.7 MT of Crude Steel in 2020, down by 9.8% over 2019. The production in US was lower by 17.2% at 72.7 MT in 2020.

Outlook for Steel Industry

Riding on a positive consumption and demand trend in the steel industry, the coming times looks on the green side. WSA in its forecast sees a 2.7% growth in steel demand reaching to 1,924.6 MT in 2022.

Indian Steel Scenario

As per Joint Plant Committee (JPC), production of Crude Steel during fiscal 2020-21 stood at 102.4 million tonne (MT), a decline of 6.1% over 2019-20. Finished Steel production also registered a negative growth of 7.8% to stand at 94.7 MT during 2020-21, compared to previous year. While Exports of total Finished Steel increased substantially by 29.1% to 10.8 MT during 2020-21 over previous year, imports declined by 29.8% to 4.8 MT.

As per Joint Plant Committee (JPC), production of Crude Steel during fiscal 2020-21 stood at 102.4 million tonne (MT), a decline of 6.1% over 2019-20. Finished Steel production also registered a negative growth of 7.8% to stand at 94.7 MT during 2020-21, compared to previous year. While Exports of total Finished Steel increased substantially by 29.1% to 10.8 MT during 2020-21 over previous year, imports declined by 29.8% to 4.8 MT.

Business Overview

The company achieved Sales Turnover of Rs 68,452 crore during the Financial Year (FY) 2020-21, which is higher by 12% as compared to corresponding period of last year (CPLY) mainly due to increase in Net Sales Realisation (NSR) of Saleable Steel of 5 Integrated Steel Plants by 10% and higher Sales Volume by 5%. During the Financial Year 2020-21 the Profit Before Tax and Profit After Tax are Rs 6,879 crore and Rs 3,850 crore respectively which shows a substantial growth as compared to CPLY Profit Before Tax of Rs 3,171 crore and Profit After Tax of Rs 2,022 crore There is an accounting impact of Rs 1,289 crore on Profit After Tax due to switch over to new tax regime under section 115BAA.

During the FY 2020-21, despite the lockdown in the Country during Q-1 because of Covid-19 situation, there has been significant improvement in the performance of the company mainly on account of increase in NSR of Saleable Steel (10%) and significant reduction in the imported coking coal prices (21%). The profit has further improved due to increase in saleable steel sales (5%) on account of higher demand of steel, higher sale of pig iron, secondary products and iron ore fines, decrease in expenditure of stores and spares, purchased power rates, interest charges etc. and higher dividend income, foreign exchange gain and reversal of Covid-19 discount on sub grade iron ore fines.

There has been significant reduction in the borrowings of the company during the FY 2020-21due to improved cash flows because of increasing steel prices and demand in India. The Company had borrowings of Rs 37,677 crore as on 31 March 2021 st vis-à-vis Rs 54,127 crore as on 31 March 2020 in line with INDAS. The Company has hedged the foreign currency risk on Buyers’ Credit and External Commercial Borrowings. The debt equity ratio of the Company as on st st 31 March, 2021 decreased to 0.87:1 from 1.36:1 as on 31 March, 2020 primarily due to decrease in borrowings during the year. The net worth of the st Company increased to Rs 43,495 crore as on 31 March 2021 from Rs 39,777 st crore as on 31 March 2020.

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Operations

During the FY 2020-21, in-spite of the challenges of the market and the lock down and other restrictions imposed to contain the Covid-19 pandemic, the company achieved Saleable Steel production of 14.602 million tonne (MT). Hot Metal and Crude Steel production during the FY 2020-21 was 16.582 MT and 15.215 MT respectively. There is negative growth in the Production over last year owing to the restricted production mainly in Q-1 of FY 2020-21 due to Covid-19 pandemic.

At Bhilai Steel Plant (BSP), Blast Furnace-8 produced 2.45 MT of Hot Metal during the FY 2020-21, surpassing 2.36 MT achieved in the previous financial year. The SMS-III achieved its best ever production of 2.2 MT, surpassing the previous best of 1.14 MT achieved in the financial year 2019-20. The Plant has achieved best ever yearly Prime UTS-90 Rails production from its newly commissioned Universal Rail Mill at 6.29 lakh tonne in the FY 2020-21 against 5.38 lakh tonne in 2019-20. The improvement in production from new Universal Rail Mill (URM), has enabled a record loading of long rails at 7.36 lakh Tonne in FY 2020-21 against 6.33 lakh Tonne in 2019-20, registering a growth of 16.3%. A new grade of Rails (R 260) was developed and supplied to Indian Railways. At BRM, rolling of “SAIL SeQR” grade TMT bars (>10-20 mm) was successfully developed in the FY 2020-21. The Mill has produced 3.84 Lakh Tonnes of Finished products this year, overcoming the previous best of 1.83 lakh tonnes achieved in the year 2019-20. The company has supplied 10.87 lakh tonnes of Rails to Indian Railways in the FY 2020-21, out of which 68% component was 260 metre long rail welded panels, which has been best ever quantity supplied with a growth of 16.5% over CPLY.

Durgapur Steel Plant (DSP) recorded highest ever production from its new Medium Structural Mill (MSM) at 2.94 lakh tonnes in FY 2020-21 against 2.17 lakh tonnes during 2019-20. Among other remarkable achievements, the Plant recorded the best ever despatch of 13,688 numbers of WAG9 Wheels (an import substitution product) for electric locomotives. WDG4 Loco Wheels (500 nos.) were developed first time within a span of two months, the fastest development of any wheel type in a period of two months. Special low C (C-0.04%), low Mn and Al killed steel cast in Bloom and Round Caster for cold rolled applications and hollow structures were also developed.

At Rourkela Steel Plant (RSP), New National Benchmark was registered with nd respect to highest number of 48 blows in single Converter “C” on 2 July, 2020 and highest campaign life at 2500 heats in Torpedo Ladle during March, 2021. Successful rolling, finishing and supply of 4304 tonnes of API 5L X 70m PSL2 grade steel plate for pipeline transportation system was carried out. DMR-249B Bokaro Steel Plant (BSL) registered the best ever figures for BF Productivity 3 3 at 1.74 T/m /day and Specific Water Consumption at 3.40 m /TCS during the FY 2020-21. Highest ever BF-1 Hot Metal Production of 1.11 MT was recorded, surpassing the previous best of 1.03 MT achieved in the year 2009-10 and highest ever production of CR Coil for Sale from CRM-III at 4.7 lakh tonnes was achieved, surpassing the previous best of 4.6 lakh tonnes achieved in the year 2019-20.

At IISCO Steel Plant (ISP), with regard to development of new grades and sections to widen the product basket, 17 new grades, 4 new sections and 2 new products have been developed and dispatched in the FY 2020-21. Major Grades developed were Electrode Quality Grade, Cable Armour Quality, EN8D & EN8DCr Medium Carbon Wire Rods, High Carbon Basket (HC38B to HC80B) including PC115. New sections which were developed and dispatched included ISMC 300 Channel at WRM; 14 mm WRC, 6.5 mm WRC for Africa, 6 mm TMT Coil, 40 mm TMT bars at Bar Mill (the highest section in Bar Mill). Export quality semis in various grades (4sp, 5sp, SPHC, SS400) in 150x150 mm & 200x280 mm were also developed during the FY 2020-21.

Raw Materials

During the FY 2020-21, total requirement of iron ore was met from the captive sources. The company’s captive mines produced about 30.06 million tonnes (MT) of iron ore. However, in case of clean coking coal, a requirement of about 1.59 MT was met from indigenous sources (Coal India Limited & captive sources) and for the balance requirement of coking coal (13.70 MT), the Company had to depend on imports due to constraint of availability of required quantity and quality, within the Country. In the FY 2020-21, production from the captive collieries of the Company was about 0.55 MT, out of which 0.09 MT was raw coking coal and balance 0.46 MT was non-coking coal. In case of fluxes, around 1 MT of limestone and 0.77 MT of dolomite were produced, giving a production of 1.77 MT fluxes from captive sources. For thermal coal, the company depends entirely on purchases from Coal India Limited except for small quantity produced from the captive mines.

Sitanala Coal Block

Consequent to the SAIL’s letter dated 12 March, 2018 to Ministry of Coal (MoC) th regarding returning of Sitanala Coal Block, MoC, vide letter dated 4 October, 2018 issued a Termination Notice against Allotment Agreement and Allotment th Order, in respect of Sitanala Coal Block and on 25 October, 2018 advised the bank to invoke the Bank Guarantee(BG) of Rs 10.43 crore. SAIL had preferred Writ Petitions before the Delhi High Court to challenge the Order dated th 4 October, 2018. Though, Hon’ble Delhi High Court declined to pass any interim order, but clarified that if the petitioner prevails in this petition, the consequential direction for refund of the amount collected by invoking the BG will be passed. The matter is sub-judice.

Parbatpur Coal Block

Consequent to the SAIL’s letter dated 8 March, 2018 to Ministry of Coal (MoC) th about returning of Parbatpur Coal Block, MoC, vide letter dated 5 December, 2019 issued a Termination Notice against Allotment Agreement and Allotment Order in respect of Parbatpur Coal Block and advised the bank to invoke the BG of Rs 62.57 crore.

Sales & Marketing

During the Financial Year (FY) 2020-21, the company achieved its best ever Saleable Steel sales volume of around 14.937 million tonnes (MT), registering a growth of about 4.4% over previous year. Continuing its efforts to enhance presence in the international markets, the Company took a big leap, with saleable Steel exports being highest ever at about 1.924 MT, achieving thereby a growth of over 64% over the previous year. Further, in its pursuit for increased exports, the company has entered into several new markets for various product categories.

Modernisation & Expansion Plan

The Modernisation and Expansion Plan (MEP) at Rourkela, Burnpur, Durgapur, Bokaro and Salem Steel Plants and all major facilities under MEP of Bhilai Steel Plant have been completed. The various facilities are under operation, stabilization and ramp up.

The Revised Cost Estimates (RCE) of MEP of all the Plants have been approved progressively by year 2020-21. Considering these RCEs, the indicative investment for MEP is likely to be Rs 80,170 crore (Gross) (excluding the sustenance schemes). The cumulative expenditure of Rs 68,267 crore (Gross) has been incurred till March, 2021 on MEP (excluding sustenance schemes).

A capital expenditure of Rs 4,283 crore has been incurred during FY 2020-21 against the revised estimates of Rs 4,800 crore and capex planned for the Financial Year 2021-22 is Rs  8,000 crore.

SAIL FY22Q2

October 29, 2021; Domestic steel giant SAIL on Friday reported an over 10-fold jump in its consolidated net profit at Rs 4,338.75 crore for the second quarter ended September 2021.4

The company had posted Rs 436.52 crore net profit in the year-ago quarter, Steel Authority of India Ltd (SAIL) said in a regulatory filing.

During the July-September period, the company said its total consolidated income also increased to Rs 27,007.02 crore, from Rs 17,097.57 crore in the corresponding quarter of the previous fiscal.

SAIL's expenses during the quarter were at Rs 21,289 crore as against Rs 16,733.63 crore a year ago.

On a standalone basis, the company posted a net profit of Rs 4,303.62 crore during the quarter.

It had registered a net profit of Rs 393.32 crore during the same quarter last year.

Its total standalone income rose to Rs 27,057.53 crore from Rs 17,121.22 crore in the same period last fiscal.

During the quarter, its expenses stood at Rs 21 304.64 crore compared to Rs 16,733.29 crore in the year-ago period.

In a separate statement, SAIL said it produced 4.468 million tonnes (MT) crude steel during the quarter under review, and sold 4.280 MT steel.

"Gross borrowings were at Rs 22,478 crore as on September 30, 2021 against Rs 35,350 crore as on March 31, 2021, which is a reduction of Rs 12,872 crore during H1 FY'22 (financial year 2021-22)," the company said.

The company's board has approved an interim dividend of Rs 4 per share for the current fiscal year, it said.

References

  1. ^ https://www.sail.co.in/en/company/about-us
  2. ^ https://www.sail.co.in/en/products
  3. ^ https://www.sail.co.in/sites/default/files/2021-09/SAILAnnualReport2020-21.pdf
  4. ^ https://www.moneycontrol.com/news/business/earnings/sail-q2-net-profit-jumps-over-10-folds-to-rs-4338-crore-declares-rs-4-interim-dividend-7653701.html
Tags: IN:SAIL
Created by Asif Farooqui on 2021/11/09 13:54
     

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