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Strong beat on EBITDA driven by lower costs; EU losses decline

Highlights of standalone results:

* 3QFY25 revenue stood at INR328b (-5% YoY/+1% QoQ), in line with our estimate.

* Steel production stood at 5.41mt and deliveries came in at 5.29mt (+8% YoY/ +4% QoQ), in line.

* Weak metal prices resulted in muted ASP, which declined by 13% YoY and 2% QoQ to INR61,900/t.

* EBITDA stood at INR75b (-9% YoY/+13% QoQ), better than our estimate of INR62b. EBITDA/t came in at INR14,179/t (-16% YoY/+10% QoQ), against our estimate of INR11,570/t, primarily led by lower-than-expected costs. Other expenses included write-backs of INR14b related to provisions for claims no longer required.

* APAT stood at INR40b (-13% YoY/+13% QoQ) against our estimate of INR32b.

Highlights of European operations:

* Consolidated steel deliveries stood at 2.1mt (+8% YoY/-1% QoQ), in line our estimate.

* Revenue stood at INR195b (+2% YoY/-2% QoQ), in line with our estimate of INR194b.

* EBITDA loss stood at INR7.4b vs. our estimated loss of INR10.6b.

* EBITDA loss per ton declined to USD42/t in 3QFY25 from USD76/t in 2QFY25 (vs. our estimated loss of USD60/t), primarily because of lower operating costs (led by UK closure of BFs) and lower energy costs in the Netherlands.

Highlights of consolidated results:

* Revenue of INR537b (-3% YoY/flat QoQ) was in line with our estimate. Sales volume stood at 7.7mt (+8% YoY/+3% QoQ), which was offset by muted ASP of INR69,493/t (-10% YoY/-3% QoQ).

* Adjusted EBITDA stood at INR72b (+25% YoY/+30% QoQ) against our estimate of INR45b, translating into EBITDA/t of INR9,268/t (+15% YoY and +26% QoQ).

* 3Q APAT stood at INR7.4b against our estimate of INR1.9b.

* For 9MFY25, revenue declined 5% YoY to INR1623b, while EBITDA grew 28% YoY to INR194b. The company reported APAT of INR25b, up 42% YoY.

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