Public sector steel major Steel Authority of India (SAIL) is actively considering rolling out the next phase of its expansion programme, which would see its capacity go up to 50 MTPA from around 19 MTPA now. SAIL chairperson Soma Mondal talks to FE’s Surya Sarathi Ray about the vision driving the company’s growth agenda. Excerpts:

SAIL performed well in the December quarter of the FY22 fiscal. What is in store from you in the last quarter? How is the overall fiscal likely to turn out?

Our performance in the third quarter as well as the first nine months of the FY22 financial year has been good as compared to the corresponding period last year (CPLY). Net profit in Q3FY22 grew by 12% y-o-y and for the nine-month period, it stood at Rs 9,597 crore, as against only Rs 406 crore in CPLY. Our production figures for hot metal, crude steel and saleable steel were the best ever in both the third quarter and on a nine-month basis.

We are hopeful of the domestic steel market being buoyant in the coming months. Our optimism stems from the good demand outlook, coupled with the government’s robust funding plans for the infrastructure sector.

What share of the domestic steel market do you enjoy now and how do you see that rising in the near future?

Our current finished steel market share is estimated to be around 13%. As I just said, the outlook for the steel industry remains positive. In its outlook for the short term, the World Steel Association has projected Indian steel demand growing by 6.8% in 2022. This augurs well for the domestic steel industry’s capacity expansion plans. Expecting this growth momentum to be maintained over a longer period, we intend to enhance capacity and expand our market base. We are working on a comprehensive marketing programme which looks to leverage various existing and potential markets in the country, including the retail and rural sectors, along with the conventional steel-consuming sectors.

What will be your focus areas in the upcoming fiscal? Do you indeed plan to expand capacity to 50 MTPA, as was announced earlier?

Our immediate priorities are higher capacity utilisation, enhancing the share of special and value-added steel products in our product basket, improving productivity and techno-economics, optimising costs and reducing borrowings. And we do plan to go ahead with the next phase of modernisation and expansion. Our debt-equity ratio of 0.42, as of March 31, 2021, gives us the confidence and the opportunity to embark on the next phase of our journey.

You have cut debt sizeably. What’s your long-term plan on this front?

Yes, debt management and reduction remains one of our priorities. The company is spearheading various strategies to consistently reduce its debt levels. You would know that SAIL’s borrowings came down to Rs 19,128 crore (as of December ’21, from Rs 35,350 crore on March 31, 2021. We are determined to maintain this momentum as it would allow us to embark on the next phase of our expansion plan confidently.