Indian steelmaker SAIL's quarterly profit rises as domestic prices improve

Steel Authority of India, the country’s largest state-run steelmaker, reported first-quarter profit that more than doubled on Friday, as stronger domestic steel prices and an inventory-related gain offset higher coking coal costs.

SAIL’s standalone net profit rose to 16.36 billion rupees ($169.42 million) for the quarter ended June 30, from 6.85 billion rupees a year earlier.

Domestic prices of flat steel products, including hot-rolled and cold-rolled coils, rose significantly from the previous quarter and a year earlier, supported by a weaker rupee and rising export offers from Chinese suppliers, analysts at Elara Capital said.

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Revenue from operations rose 1.3% to 262.46 billion rupees.

Elevated costs of iron ore and coking coal, key inputs for steelmakers, moderated some of the benefits from improved steel prices, but did not dent the firm’s overall expenses because of a one-time inventory adjustment.

The company logged an inventory gain of 22.50 billion rupees, partly on sub-grade iron ore fines, iron ore particles with higher impurities.

While the cost of raw materials consumed rose 17.4%, total expenses dropped 4.2% to 241.46 billion rupees.