This PSU did not do too well in Q1FY13, as net profit at Rs.99.41 crore was down 9% (YoY) and this was despite the 15% jump in net sales at Rs.242.57 crore. A 64% rise in operating expense, with employee costs forming 39% of the total outgo, the company’s bottomline declined. The write back of other income to the tune of Rs.52.27 crore also helped stem the fall.

Production in current Q1 was at 247276 tonnes, up 3.2% on a YoY and it sold 315587 tonnes, an increase of 42%.  Realisations have dropped in the quarter, with ferro grade at Rs.10.155/tonne compared to Rs.11,745/tonne in Q1Fy12. That of Fines fell from Rs.3153/tonne to Rs.2675/tonne. Thus average sales realization per tonne for Q1FY13 was atRs. 6852 v/s Rs. 8380 of Q1FY12. The company has various expansion projects ongoing and the capex is at Rs.551 crore. Most of the company’s manganese is supplied to steel sector and thus if steel does well, this company also will do well. The fall in realization was due to global slowdown reducing overall price of the metal. So though demand remains robust, till world economies don’t pick up, realisations could remain under pressure.