Ladies and gentlemen, good day and welcome to Steel Authority of India Limited. Q1 FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kejriwal from Nuvama Wealth . Thank you. Over to you, sir.
Thank you, Amshad. Good afternoon, everyone. On behalf of Nuvama Wealth Management, we welcome you all for Steel Authority of India's first quarter call. We are pleased to host Dr. Ashok Panda, Director Finance, along with his team. Now I would request the management for his opening remark, and thereafter we can open the call for Q & A. Thank you. Over to you, sir.
Thank you very much Mr. Ashish. Very good afternoon everyone present on this concall. Let me welcome all our investors and analysts who are joining this region concall for the financial results of Steel for the quarter 1 FY 2025-2026. I'm sure most all of you would have gone through the financial results available on the website of the company and stock exchange. Results were out on 25th. However, I would briefly apprise you on the same before we move to the question and answer section where we would be happy to receive questions from your side.
will try to answer those questions.
Let us look at the economic scenario. Let me first apprise you on the economic scenario in which we've been operating. The global economy has been battling the inflationary forces for quite some time now. The countermeasures by the economies across the globe led to the decline in GDP growth rates in the countries. Global GDP growth rate is projected at around 2.4% in 2025, down from nearly 2.9% in 2024, driven lower by escalating trade tensions, rising protectionism, and policy uncertainty. IMF forecasts it at approximately 3.3% and OECD advanced economies like U.S. and Eurozone to grow just at 1.3%- 1.5%. This slower pace is fueled by tariffs, particularly sweeping U.S. trade measures, and fragmented supply chains. Global inflation is cooling right now. Headline inflation is expected to fall to around 4.1%- 4.2% in 2025, down from pandemic era peaks. Nonetheless, central banks remain cautious about it.
The ECB recently held its benchmark rate at 2% given lingering trade war risks, while U.S. Federal Reserve, despite maintaining a high interest rate, hints at rate cuts later in the year if inflation continues.
To.
Amid global headwinds, India continues to outperform. India's fundamentals remain stronger. Over 80% of Indian CEOs are optimistic about the growth prospects, buoyed by demographic advantages, expanding middle class, and a shift towards service-led development. In fiscal year 2024-2025, GDP growth reached around 6.4%, driven by robust private consumption growth at 7.3% and healthy activity across agriculture, industry, and services. Central agencies like OECD and UN project India's economy will expand by roughly 6.3%- 6.7% through 2026. Inflation levels are remarkably low. Retail inflation in June stood at just 2.1%, well below the RBI's full year target of 3.7%. With easing price pressures, the RBI is signaling room for interest rate cuts to boost liquidity and investment in the country. The Indian government's multi-pronged strategy aims to counter global disruptions with domestic strength. CapEx is the growth engine for our country and we're expecting CapEx to increase further.
It will result in sustaining long-term growth, promoting infrastructure investment, and job creation in the country. Foreign Trade Push, the recently signaled India-UK FTA in July 2024-July 2025, is expected to unlock opportunities for startup companies, manufacturing, and services exports without compromising India's strategic interest on the front of global and domestic vulnerabilities. We still remain with respect to rising protectionism and volatile capital flows due to trade disputes, particularly U.S. tariffs on China and Europe, agricultural and rural inflation spikes post-monsoon, climate shocks impacting global food supplies, and commodity prices. India should build capabilities in services and high-value sectors going forward. When we talk about the world steel scenario, coming to the steel scenario, this stem has been much in line with the economic situation. As of mid-2025, the global steel market is growing slowly with total demand expected to rise by just 1.7% globally, according to WSA.
Advanced economies, particularly Europe, Japan, and the U.S., are experiencing stagnant or declining demand, mainly due to slower construction activity and higher interest rates. On the contrary, developing economies led by India, Southeast Asia, and parts of Africa are driving demand through infrastructure, urbanization, and industrialization. China, which accounts for more than 50% of the global steel production, is facing a historic slowdown in domestic demand, largely due to prolonged real estate prices, tight credit conditions, and weak exports. In response, Chinese producers are offloading excess steel in international markets at lower prices, leading to global oversupply and price suppression. This has triggered trade tensions and protective measures across several countries, including India and UAE countries.
And U.S.
Now let us look at the Indian steel industry. Coming to this industry, domestic steel demand is growing at a rapid pace, over 8% annually. This demand is driven by infrastructure projects, affordable housing, railways, ports, highways, growth in automotive, defense, and renewable energy sectors. India's per capita steel consumption has doubled in the last decade, reaching more than 120 kgs right now. Though still below the global average, it is indicating immense headroom for growth in the future years. However, challenges remain in the form of rising imports, global oversupply, and input dependence. Input dependence means it is basically coking coal. Its variability in the price is determining the cost of production out here. Rising imports means steel imports surged over 24% in 2025, especially from China, Vietnam, and Japan, creating pressure on domestic producers. However, imports in this quarter one of this year is under control.
The prices of steel have also been operating in a narrow band. With the prices stabilizing in the past one or two weeks, right now there are hopes for improvement in the next quarters, which has traditionally remained the strongest for steel producers. Now let us discuss about the company performance for the quarter Q1. Coming to the performance of SAIL during quarter one FY2025-2026, this same has been as follows. Salable steel production during the quarter stood at 4.7 million tons as against 4.2 million tons last year quarter one, with a growth of 12%. Sales volume stood at 4.55 million tons as against 4 million tons in last year quarter one, with a growth of 15%. In fact, this is the best ever first quarter performance in sales in any financial year for SAIL.
On the financial front, due to impact of lower prices, turnover could register a lower growth of 8% aided by improvement in efficiency parameters. The profit before tax registered a growth of more than 2.7x to stand at INR 890 crore this quarter, vis-à-vis INR 326 crore last year quarter one before exceptional items, and after exceptional item it was I think only INR 14 crore last year quarter one. The company continues its drive towards reduction in borrowing as on 30th June 2025, which stood at INR 28,741 crore as against INR 29,811 crore as on 31st March 2025. We have reduced our borrowings by around INR 1,100 crore in quarter one this year.
On the front of sustenance and operational efficiencies, we have improved the fuel rate, coal to hot metal ratio, increased CGI, reduced coke rates, and reduced specific energy consumption this quarter as compared to the previous quarter, which has given us advantage on the cost front as well as grilling the steel. Our CO2 emission levels have also improved in this quarter as compared to the previous quarter and as compared to quarter one of last year. However, we are still having more targets to improve it further. We are focusing on zero liquid discharge, eco restoration of areas and regions, and we are focusing also on CSR activities for giving benefit to the stakeholders in the society. This is a nutshell about the overall scenario. With these words, I hand it back to Mr. Kejriwal for opening the Q&A session. Thank you, Mr. Ashish.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, please limit your questions to two per participant. We will wait for a moment while the question queue assembles. The first question is from the line of Amit Lahoti from Emkay Global. Please go ahead.
Thanks for the opportunity.
My question is on cost. How much was our blended cost of coking coal in Q1?
Yeah, that is the question. It is INR 16,918 per ton.
Okay, so it is flat versus the previous quarter.
Previous quarter was 17,653 on average. There's a bit of improvement here, around INR 600-700 per ton.
Okay, we are seeing better coking coal prices as well as the coke rate. One thing which I wasn't able to reconcile was the delta in EBITDA per tonne, and that is partially due to higher cost. If you can help reconcile that, which cost items have actually moved up.
Regarding your talking about EBITDA per tonne which is INR 6,400 now as compared to INR 6,000 in quarter one last year. When we look at the imported coal price, average coking coal cost is INR 16,918. Quarter one previous year was just 1 sec.
20,020.
It is a little less than that. There is an improvement in the production volumes in this quarter one as compared to the previous quarter ones. In the EBITDA numbers, when we talk about EBITDA numbers, actually we've got advantage in the imported coal and because the royalty is more in the iron ore. There is a disadvantage in the NSR front, there is a disadvantage, but EBITDA is also down. EBITDA per tonne of salable steel is down primarily because of the stock inflation rates because, as you understand, because of the reduction in the imported coal rates, the cost of production has come down and as a result of that, the stock valuation rate of the items, steel items and iron items, they have come down drastically. It has impacted the P& L account in terms of accounting.
That's the reason why the EBITDA per tonne of salable steel appears to be a little less as compared to last year quarter. Tony.
Okay, where do we see the guidance for Q2 on coking coal?
Because so far as Q2 guidance is concerned, coking coal prices are almost flat as it was in quarter one. We are hoping that it will remain at the same level. A little bit of variation here and there won't be on the downside, could be little up or maybe at the same level. That's about the coking coal. Now, talking about the stock valuation impact, it is a one-time impact which has come in quarter one because of the reduction in the cost of production and then transition from last year to this year. That impact is unlikely in quarter two. It will not be there in quarter two. Quarter two will have advantage with respect to the stock valuation rates, and the coal prices will remain flat. That will ease out our cost of production.
Okay, thank you and all the best.
Thank you.
Thank you. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Yeah, hi, good afternoon everyone. Thanks for the opportunity. Couple of questions from my side. The first one is on the CapEx. What was the CapEx in this quarter? How much CapEx do we expect this year? If you can also highlight the status of the CapEx project that we have planned plant wise.
Yeah, CapEx, first of all, let me tell you CapEx last year was close to INR 6,000 crores, and this year we have kept a target of INR 7,500 crores for the year. It is a higher target, and we are confident that we will be able to achieve that. In Quarter one, we have already crossed the target which we had given. I'll just give you the number a bit later. The number is, Quarter one target was how much? Quarter one, we have achieved INR 1,642 crores, which is more than the target we had set for Quarter one.
And.
For the entire year the target is as I have told, INR 7,500 crore and we have got the plans to achieve it. So far as the facilities are concerned, as you said, actually we have got the facilities which are in the pipeline, the facilities which are under execution. From there we are getting the CapEx and SAIL is doing expansion to start with in IISCO Steel Plant. The majority of the lot of expenditure of CapEx in IISCO will come from next year. That means from next year onwards the CapEx figures will be still higher than INR 7,500 crore which is there this year. A bit of that IISCO CapEx on account of expansion may surface this year, but most of the CapEx will be from the ongoing projects which are happening in the various plants.
Okay sir, the second question is on the rail price revision. Saw some advantage that we had to the QNome INR 173 crore. This pertains to FY2024 as highlighted in notes to accounts. Just wanted to understand the current rail price and what was the rail price booked in FY2024 and how much of this advantage can we get further down the.
Yeah, let me tell you the figure. The figure which was finalized by joint pricing committee was for 2023-2024, and on that basis, because we had taken the income at INR 78,000, it was little more than that, INR 79,000 something. It got around INR 173 crore in the accounts; that is for 2024. Now, 2024-2025 incomes were at INR 70,000, which was continuing. From 2025-2026 onwards, the provisional price has been at INR 74,000 per ton because of the softening of imported coal prices. The provisional prices have been kept less. That's the reason why accounting is already done in this manner, and going forward we'll have no issues on this.
Can we expect some more benefit from this, you know, or everything for FY24 has already been taken into account?
More benefit in this sense. This is already.
D ue to rail price revision.
Yeah, rail price revision benefit will not come in this year further because this is already actualized. It's already actualized, and that is why no more arrears are expected in this year.
Got it, sir. Thank you so much and all the best.
Thank you. The next question is from the line of Ashish from MLP . Please go ahead.
Hello. Hi. Am I audible?
Yes sir.
Hi sir. Sir, how much is the stock valuation impact this quarter?
Yeah, stock valuation impact this quarter is around INR 1.05 billion.
1,050 code is a one off which will not repeat next quarter onwards. Is that correct to say it will.
Not repeat next quarter? This is quarter one versus quarter one.
Okay. Okay. This was not there in Q4.
This was not during last Q4. Some amount of population impact due to the high plus or minus, something like that. Mezzerlit was not there in Q4. When we compare this Q1 versus Q4, impact is around INR 950 crores.
Okay. What would be the impact because of higher royalty on iron ore this quarter?
This quarter is basically because of the IBM.
What is a Q4?
Yeah.
Versus Q4, it could be somewhere around. We had say around INR 250 or INR 260 crore. Just one sec, INR 173 crore to be specific.
Did we get any revenue? Sorry.
Yes please.
Did we get any revenue for sale of NMDC Steel? I mean for marketing NMDC Steel. Last quarter we highlighted we got some revenue.
Yeah. 0.373 million tons we have sold actually and INR 1,800 crore revenue. We have got a revenue of around in this quarter, around INR 1,800 crores. Odd that revenue.
Okay.
Adjusted for that, what would be the realization increase this quarter versus Q4?
In terms of what? INR per tonne.
INR per tonne?
Yeah.
NSR increase INR per ton for Q1 versus Q4.
Just one sec.
Just one.
Q1 versus Q4, Q1 is around INR 1,600 per ton, increasing.
INR 1,600.
Yeah.
Okay.
How should we look at the NSRs for average of Q2 versus Q1?
See, everybody knows about it actually because in the rainy season which is there in Q2, the prices remain little compressed. Steel prices are down in July. As I have already given in my opening remarks, in the last one or two weeks it has started improving. There are signs of improvement in the prices in the flat as well as in the long products. Hopefully next month and next to next month, August and September, this slide which has taken place in July would be offset. Q2 price compared to Q1, that is what it looks like at this moment.
Understood. Fair enough. Thank you, sir.
Thank you. The next question is from the line of Pratik Singh from DAM Capital Advisors. Please go ahead.
Hi sir.
Thanks for taking my opportunity. Just following on Ashish Kejriwal's question earlier, if you can give us actual number, sir. NSR both flat and longs for Q1 as well as Q4 in INR per ton.
Q1 long is INR 54,500 and Q4 long is INR 53,300. In case of flat, Q1 is INR 50,400 and Q4 is INR 47,300.
Sir, if we saw a decent increase in NSRs, I was a bit confused when I look at the slides. The slide where you show an EBITDA bridge from Q4- Q1, two things caught my eye. One was that the sale price NSR, we are putting a negative number in the sense that it's impacting the EBITDA negatively when moving from Q4- Q1, that is one. The second is the raw material usage is also hitting us negatively. What is the raw material usage?
I would assume that given.
That we produce less, so usage also would be lower.
So.
No, it is not like that. Actually, I can explain you. When we compare, you are asking question about Q1 versus Q4. When we compare Q1 versus last year Q1, everything appears to be very much positive. When we compare Q1 versus Q4, then even raw metal issues front, there is a negative because the techno economic parameters in quarter one are adverse as compared to quarter four. Quarter four happens to be the best producing month, and that is why best technological parameters as well as production volumes in quarter one. What happens in all the organizations, they go for capital repairs, shutdowns and all that. Productions are not that consistent as compared to quarter four, and that is the reason why when we regulate and throttle the production, then the technological parameters also get impacted.
That is why the raw metal exchange is adverse in this quarter one compared to quarter four. However, these are better than quarter one of last year. Source of production volume in this quarter one is less than that of quarter four of last year. Quarter one as compared to quarter one, there is an improvement even in the person volumes. That is why.
Pardon.
On the NSR. Sir, why are we showing an adverse impact of NSR despite an improvement?
No, if you look at that, actually that can be split into two categories, which we'll do from the next time. One is NSR impact, and the other one is stock related impact. When we look at the total net impact, it is INR 258 crore minus . Out of that, around INR 950 crore minus is because of the stock valuation, and you can say around INR 600-INR 700 crore plus is because of the sales price increase. On the sales NSR front, there is a positive of around INR 650-INR 700 crore. However, there is a negative on account of stabilization rate impact of around INR 950 crore. On the whole, it is -INR 258 crore.
Understood, sir.
Sir, can you just tell us.
What are the spot NSRs right now in longs and flat?
What are the.
Pardon?
What are the current NSRs that we are seeing right now?
Maybe as of
July, expected NSR is somewhere around. Long is around INR 51,500 and flat is around INR 48,600.
Understood, sir. Sir, any guidance as to what kind of full year volumes in terms?
Of sales we would be doing?
Where in quarter two?
No sir, full year for 2026.
Yeah, for the full year we are expecting somewhere around 18.5 million tons.
Okay.
Just the last suggestion. This is something which I've seen over the past few quarters in the production performance slide. Sir, it would be best that we mention whether it's for the quarter or for the cumulative till that quarter because this time it's saying FY25. I assume it's 1Q because it's easy. Usually in 2Q, 3Q also it says FY25. We get confused whether it is for the first three or four or only for that quarter. Just a suggestion to make it more clear in the production performance line, sir.
Thank you.
We have noted your suggestion. We'll do that. Yeah.
Thanks a lot.
Thank you. The next question is from the line of Kamlesh Bagmar from Lotus Asset Management. Please go ahead.
Yeah, thanks for the opportunity.
Sir.
I just wanted to understand more about this stock valuation. I think it is more of a finished course you have. So is it more that we have valued the inventory at the current prices, what we have done with the stock valuation? Because for the first time we are hearing in the, we are getting the adjustment from your side that in SAIL we are seeing the stock valuation thing.
Now let me answer this question. Actually, stock valuation is there everywhere. Every time by every company, it is done by every company. It's a part of the P and L account. In this year, because there is a transition from last year to this year and as all of us know, coal prices are down. When the coal prices are down in quarter one as compared to the average of last year by around INR 6,000 or whatever it is, based on that, the cost of production is also quite less. Since cost of production is less and our stock valuation is taking place with respect to cost of production, not NSR, that is why there is a hit on the stock valuation rate in stock acquisition and decretion.
This impact is around INR 1,050 crore quarter one versus quarter one and around INR 950 crore quarter one versus quarter four. This is just a one-time drop of the stock valuation rate in the stock acquisition decretion. It is related to coking coal only. It is mostly related to the coking coal, but the cost is not only decided by coking coal. It is based on the efficiency and other things, but impact of other items are pretty less as compared to the imported coal.
Secondly, on the CapEx side, sir, have we got the approval from the board on the CapEx side? Because we were telling that we were guiding that there would be new capacity announcements and all that out and we would be placing the orders for that capacity. Any update on that part?
Yeah, we have got it approved, INR 7,500 crores for this year is approved by the board, and that is our target. As you have mentioned about the new capacities, we have got the expansion plans in pipeline, and the tendering activities are going on in IISCO Steel Plant, wherein we are planning to have 4.5 million tons of expansion plan over there. As I have already explained, the expenditure in that will generally start from the next year, from 2026-2027, because the orders will be placed and then the other activities will start from next year. That is how the expenditures will start coming from the next year regarding that expansion. Back to back, we are planning expansion in other plants as well, in other facilities, so those things will also follow going forward.
Okay, excellent.
Thank you. The next question is from the line of Sumangal from Kotak Securities. Please go ahead.
Yes, thank you Sir, a couple of questions. First is given that the IISCO Steel Plant expansion will kind of pick up pace next year, the INR 7,500 crore could go to what number ballpark for FY2027.
As we have discussed, after tendering and auto placement, the education activities start and the expenditure will start from next year. We are expecting a good jump as compared to INR 7,500 crore next year onwards. The actual numbers will come only when the packages are crystallized, but I can expect that a good jump will be there in the next year as compared to this year.
Okay, and this IISCO Steel Plant will be roughly 4 million tons new capacity and some debottlenecking, right?
0.5 million ton debottlenecking.
Yeah.
Y eah. Total we are looking at some.
I mean for IISCO only, what would be the total CapEx? Some around INR 30,000- 35,000 crore.
You can say ballpark four into 9,000, INR 36,000 crore.
Okay. Sir, we'll be spending over three years, right? FY 2027, 2028, and 2029 years.
After auto placement, it is around 36 months. That's the guidance.
Got it.
Got it.
My second question is with respect to this NMDC contribution. Can you explain how is it getting accounted? Is the volume boosted because of that, or is it just some line item in revenue and some cost associated with it?
It's basically as a line item as well as a part of the stock. That is how it is appearing right now in the books of accounts. In the books it is very clear. Once we see it we can understand.
Okay.
Can you explain what is the line? I mean revenue and cost contribution in 1Q for this.
It's kind of a purchase actually from their side, purchase of stock. Purchase in the stock, you can see in the purchase in the expense that you can see. It is a purchase of stock in trade. It is stock in trade, and it is also there in the revenue side.
Okay. The volume of 4.55 million ton, does it include anything from NMDC Steel's volumes also?
In quarter one, it includes around 0.37 million tons from there.
Okay.
All right. Sir, what would be the margin contribution or difference between revenue and cost for this?
You're talking about?
Yeah, margin contribution of this NMDC Steel products marketing.
What are we doing?
It is done based on an agreement between them and us. On that basis, we do it.
At EBITDA level, is it neutral or is it positive? Is it negative?
It could be a little bit positive because which will be compensated efforts being made by marketing team.
Okay.
Okay.
Sir, for a full year volume guidance.
I may request you to rejoin the question queue for follow up questions.
Just a clarification. For this volume guidance of 17.5, are we including NMDC Steel's volume in this or not including.
18.5?
Sorry, 18.5, yeah.
That is with respect to saleable steel products.
Understood. Okay, I'll join the queue back. Thanks.
Thank you.
Thank you. The next question is from the line of Vikas Singh from ICICI Securities. Please go ahead.
Good afternoon sir and thank you for the opportunity. My first question is towards this railway pricing. This INR 74,000 which you said that this is finalized right now, what is the cost of basically production cost? We are factoring especially the coking coal. Since coking coal has been declining, is there a risk of this pricing coming down?
Let me try to clarify this point. Actually, this cost is prepared after completion of the quarter and year, and then it is also examined by different levels and then it will be done. The point of INR 74,000, what you said, is basically provisional guidance. It has nothing to do with the.
Actual prices.
Notice us.
There is, because coking coal prices have come down significantly, is there any, you know, cost advantage which you need to pass on to the railway in the subsequent quarters?
Yeah, because if you remember, if you go back to one or two years back to the price of rail price, the price of rail was pretty high as compared to what we are looking at right now. This cost is determined by a competent authority at the government level. After thorough investigation, examination reports, cost records and everything and accounts everything, this is finalized. The deflection of imported coal price is coming into the rail price itself after examination by the competent authorities. That is how it is coming. As coal prices soften, the rail prices also soften. That you must have already seen because the coal prices are at this level. Things will also be at this level.
Noted, sir. Sir, in terms of our finished goods inventory, how much of inventory we are carrying, and is that inventory at the closing price of 1Q FY24? There is a risk of markdown of these inventories as well going forward.
Yeah.
Let me answer this question. Actually, are you holding around 1.7 million tons of saleable steel and 1.3 million tons of in-process stock? These two put together are steel stock. It is steel stock and it is crude up to quarter one cost right now, which are almost at a very lower level. That's the reason why the stock valuation impact has come, as we have already explained. Going forward, we do not see any further reduction in this. There could be improvement, but no reduction.
Sorry to interrupt, sir, but I may request you to rejoin the question queue for follow-up questions. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Hi, thank you for taking my question. Just to understand, you have some finished, some inventory of input stock.
You are marketing NMDC Steel products. Can you please help us understand how should we look at sales of.
NMDC Steel from your end for rest of the year?
Yeah, that is based on the contract and then their requirement, it is being done. Exact numbers, it will be very difficult to tell right now because that plant is also sort of ramping up and they have their own ways of doing it. As per the requirement, the quantity cannot be frozen at this point of time regarding NMDC Steel numbers.
Okay, got it.
Just to reconfirm, 18.5 million ton volumes for fiscal 2026.
Is excluding NMDC, right?
That is our target.
Just one more question. Where are we in terms of coking coal inventory right now?
Where is it compared to normal inventory days?
Yeah, let me tell you. Actually, coking coal inventory right now is around opening around anything between 25- 30 days in the ports and could be around five days in the plants. Those are at the normal levels that we generally expect. We try to maintain those levels of 25 days, something like hovering around that. Right now the stocks are also at those levels.
Okay, got it. Thank you so much.
Thank you.
Thank you. The next question is from the line of Raashi Chopra from Citigroup. Please go ahead.
Thank you. Just wanted to clarify, the NSR. What is the blended NSR for this quarter?
For this quarter, the average NSR is INR 51,700 per ton.
What was that in the fourth quarter?
INR 50,100.
For July.
For July this figure is expected around four. Around INR 50,000.
Okay, thank you. On the coking coal side, you mentioned the blended coking costs were INR 16,900. What was the imported coking coal?
This is the imported coking coal is INR 17,600 and average was INR 16,900.
The imported coking coal was INR 18,500 in the fourth quarter, is that correct?
In fourth quarter, you're right.
All right. Just last question. On the inventory, that number INR 1.7 million finished and INR 3 million total. What was it in the March quarter?
In the March quarter it was 1.7 against 1.4 and 1.3 was 1.3. March quarter was 1.4, 1.3 and 30 June is 1.7 plus 1.3.
Sorry, just one more question. NMDC Steel, you indicated that the revenues were about INR 1,800 crore in this quarter.
Yes.
The purchase on stock in trade that you mentioned is about INR 2,000 crore in the P&L.
After purchase, something will be lying in the stock.
Is it fair to assume that you're pretty much breaking even at NMDC Steel? There is something positive in our case.
Actually, we do not have a negative. We have positive only, that.
Can you quantify that?
It's the given plus positive, actually. Okay.
Okay.
Thank you.
Thank you. The next question is from the line of Tushar Chaudhari from Prabhudas Lilllader Private Limited. Please go ahead.
Good afternoon sir. Thanks for the opportunity. Sir, this NMDC Steel, you said only revenue and this raw material line gets affected in P&L. There is nothing in other expenses, right? Or is there anything in other expenditure also? Because this quarter's other expenditure seems to be a little bit on the higher side, even if I look at on a per basis.
Yeah.
There is nothing of NMDC Steel in the other expenses. The other expenses are higher compared to last year. Quarter one will become a royalty.
Because I know royalty.
Royalty.
Okay. The tendering process at IISCO Steel Plant had started last quarter. How long do you think this will take?
That's what the scheduled dates given by them. Basically, order placements will take place in 2025, 2026.
Do we expect order placement by third quarter or fourth quarter?
Yeah, end of third quarter and fourth quarter, all of fourth quarter. I mean the schedule is December, January, like that.
Okay. Okay. Thanks a lot, sir.
Thank you. The next question is from the line of Ashish from MLP . Please go ahead.
Let that be the last question, please.
Okay, sir.
Thank you, sir. Thank you, sir, for the opportunity. Sir, one quick clarification on stock valuation impact of INR 950 crore. How much of it would be because of coking coal and how much of it would be because of finished steel?
I mean it is on finished steel. It is on steel only, finished, actualize in process put together. The reduction in the cost, which is given, INR 950 part of adverse impact with respect to quarter four, is primarily because of the imported fuel price.
I'm not able to understand.
Because the imported coal prices come down around INR 5,000- INR 6,000 per ton, that is why the cost of production is also down in quarter one as compared to quarter four as well as previous year quarter one. That is why the stabilization rate, which is equal to the stabilization cost, has come down and it has got an impact of around INR 950 crore with respect to quarter four. The deduction of cost is primarily the imported coal rate.
Understood.
Is it fair to say that as.
the imported coal rates increase, then you know the impact to us would be much lower because then we will get a revaluation benefit on the upside.
Yeah, of course.
Going forward, suppose the stock is lying over here or similar quantity or less quantity or more quantity. If coal prices go up, then the stock valuation rate will also increase, and that will also increase the positive impact on this.
If I look at the next.
Quarter versus this quarter, we will not have this INR 950 crore impact, then INR 250 crore of additional royalty or excess royalty because of the iron ore price. IBM price is now more or less flat, so that should not be there. There will be a negative impact because of realization. Is that the three variables that we should look at for the next quarter?
These are the three basic reasons, actually basic variables.
Okay, fair enough. Thank you.
Thank you, ladies and gentlemen. We will take that as our last question. I would now like to hand the conference over to Mr. Ashish Kejriwal from Nuvama Wealth for closing comments.
Yeah, thank you. Sir, before we ask for the final call from you, just last question from me. Side one, when you are talking about stock valuation impact, definitely that's there. In other expenditure also we are seeing it's on a much higher side because more or less fourth quarter versus first quarter it was flat despite the fact that volume was lower. We are more concerned about the higher other expenditure as compared to what it was in the fourth quarter. Secondly, in terms of valuation when we are talking about it's INR 950 crore. Assuming that nothing changes in second quarter, only price variation is there and cost is not going to change, then definitely second quarter versus first quarter. Do you think that our earnings will be deviated only because of the price change? Steel price change?
Yeah. Let me answer one by one. Actually, so far as other expense is concerned, other expense within other expense, one of the major components is royalty. Apart from that, handling and other expenditures are also there. In the royalty front, because of the IBM price movement, these figures also change. In quarter one, the figures are higher, that is why other expense figure is higher. This may vary from quarter to quarter depending on the IBM prices. Now, coming to the stock relation rates, that was a one-time kind of a hit in quarter one, so it will not be there in quarter two. It will give us a relief in quarter two and going forward. The variability will again be primarily driven by the NSR front, and we are hopeful that we'll be doing our production technological parameters as per our own guidance.
Primarily, the NSRs will be driving the fluctuations.
Understood.
You have rightly pointed that base whatever we have given in first quarter, from there to second quarter, main variation is because of the steel price.
Yes.
Okay, that's great, sir. If you can give the final remark, then we can close the call.
Thank you very much. While we are quite concerned about the global economic scenario and forecast, the Indian economy has stood out as stronger with strong demand and consumption patterns. The forecast for the Indian economy by various agencies has been quite encouraging, and the economy is expected to grow in the range of 6.3%- 6.7% over the next two years, which is enough to categorize it as the fastest growing amongst the major economies. The steel demand forecast by WSA for India is also quite promising, in excess of 8%. The government focus on infrastructure spending is a big boost to the economy in general. The steel industry in the residential sector is also expected to grow, backed by affordable housing projects and urban demand. India's capital goods sector is also expected to benefit from the momentum in infrastructure and investment in renewable energy.
Automotive and consumer durables are expected to maintain healthy growth, driven by sustained growth in private consumption. The company remains committed towards improving operational efficiencies. With the market expected to be more supportive in coming quarters, I am hopeful that good times await us and our investors going forward. Thank you very much for this interaction.
Thank you. On behalf of Nuvama Wealth Management, that concludes this conference. Thank you for joining us and you may now disconnect your line.