ROURKELA: The Rourkela Steel Plant (RSP) of SAIL is unlikely to make a decent profit in 2024-25 after consecutively suffering losses in Q2 and Q3 of the current financial year for which it had set its profit before tax (PBT) target at Rs 1,008 crore.
The dismal performance is being blamed on cheap import of steel leading to substantial fall in net sales realisation (NSR) of RSP products.
Reliable sources said in October and November of Q3, RSP incurred losses of around Rs 55 crore and Rs 52 crore respectively. The figure for December 2024 has not yet been disclosed. They said it can be assumed that RSP would face loss of not less than Rs 50 crore in December. If this happens, the loss for Q3 would be Rs 157 crore.
With a strong steel market sentiment, the RSP had ended 2023-24 with a PBT of around Rs 580 crore. Buoyed by it, it had upwardly set a PBT target of Rs 1,008 crore in its financial budget for 2024-25.
In pursuit of the ambitious target, the RSP closed the Q1 of 2024-25 on a robust note with PBT of Rs 370.04 crore followed by negative PBT of Rs 104.96 crore in Q2.
President of BMS-affiliated Rourkela Ispat Karkhana Karmachari Sangh (RIKKS) Himanshu Sekhar Bal said unless the Central government imposes anti-dumping duty on imported steel, the scenario looks bleak for RSP and other domestic steel makers. If import duty gets increased in January, RSP may at best end up the FY 2024-25 with PBT of Rs 250 crore or more. But if the current mood continues, it would definitely incur losses, he said.
In the prevailing scenario, he said, the expansion and upgradation of RSP hangs in balance. While big domestic steel players in private sector like Jindal and Tata are going for massive expansion, RSP faces a crisis situation and further delay may reduce its relevance.
General secretary of INTUC-affiliated Roukela Shramik Sangh Prashant Behera said RSP has been going through a grim phase with its products selling for cheap despite high demand to remain afloat in the market amid flooding of cheap imported steel. RSP needs to implement its expansion and upgradation proposal to enhance its production capacity from the current 4.5 MTPA to 9.3 MTPA urgently. The state government should take the initiative to remove encroachment which has been delaying the proposal, he added.