December 02, 2008

SAIL will decide on price hike in August

During a CNBC-TV18's exclusive interview, Mr SK Roongta chairman of SAIL said that the company would take a call on whether to increase prices next month. He said the company hopes to maintain margins but it depends on how things unfold going forward.

While answering to the price squeeze in last three months, Mr Roongta said that “We have taken a lot of internal actions to improve productivity. Overall, sales have been higher by 6%. Domestic sales come in higher by about 10%, while those of value added products had gone up by almost 50%. As consumption comes down, our other techno-economic parameters have improved. Although we have held on to prices which were prevailing in March, this price level was much higher than the price prevailing in Q1 of 2007-08.”

On the issue of cost pressures on margins, he said that “In Q1, EBITDA margin were about 29%. We hope to maintain these, but let’s see how things unfold. In the coming quarters, we have tremendous cost pressures to contend with, especially related to imported coal, although indigenous coal cost increase has already been accounted for in Q1.”

Mr Roongta added that “We have had tremendous input cost pressures, which we have to encounter from July August onwards. Domestic prices are much lower than international prices. We will take a call with regard to prices when this commitment period ends sometime in first week of August.”