Again, an excellent point raised by you @VALUE2017
What if global recession leads to big FII outflows, crash in global banks and Indian markets?
May be Australian and Canadian real estate bubble will burst and some banks will go bust.
What will be the impact on Indian stock markets and rest of Indian stocks?
Any idea when is the company’s lease due for renewal? In connection with NMDC, I found this on internet - “Government companies or corporations whose mining lease has been extended after the commencement of the MMDR Amendment Act, 2015, are to pay 150% of the royalty payable. In other words, NMDC will be required to pay a 22.5% royalty against 15% earlier, on iron ore volumes from all mines, except for the Kumaraswamy mine (annual capacity 7 mt) in Chhattisgarh. The same had resulted in an additional expenditure of ₹149 crore during Q4 and expenditure will be higher moving ahead”. Just wanted to know if this will hit the company any time soon.
Its approx. 35-40 years, Boria tibu is valid till 14 March 2060. Ari dongri must be 2-3 years before it.
Got it, thank you. GPIL seems to be at an advantage when compared to NMDC (not sure of other peers).
Increasing my allocation in GPIL by re-investing dividend.
12% increase in pellet capacity will offset the fall in price of pellets to a great extent.
Price of semi-steel like sponge iron, billets etc is still at pre-duty level.
Huge growth in coming years because of 4x increase in mining capacity over next 6-7 years.
In addition to huge volume growth, I also expect pricing growth as prices are at the bottom now a days.
But with the world going into recession, will there be enough demand for the existing capacity, let alone the increased capacity.?
do you know the annual iron ore consumption globally vs GPIL capacity?
It is not even 0.1% I guess
In a low demand scenario when prices fall, integrated players would have a significant cost advantage over other players.
Demand reduction may not be proportionate across companies. And it may not be absolute as well. It will be somewhere in between.
If it is proportionate then all companies will suffer same % of demand reduction. But for argument sake if it is in absolute terms then ‘x’ MT of demand reduction with a company of 100x capacity will be just 1% compared to 50% for a company of capacity 2x.
But yeah, integrated players could weather the situation longer while the weaker players bankrupt. And when the situation reverses, the company which survived will make a killing.
Disc: Have a tracking position in GPIL.
capacity will come online in 2-3 yrs. by that time recession will be over.
Anyways, GPIL is selling 100% of capacity in India, and India is growing, there is no recession here.
Indian iron ore prices have bottomed almost Rs1500/t higher than previous lows. This reflects the change in cost curve post the change in mine allocation regime to auction and subsequent aggressive bidding by steel companies.
So, here we are.
Shyam metaliks with 7600 cr mkt cap- 111 cr net profit in last quarter.
GPIL with 3900 cr mkt cap- 170 cr net profit in last quarter.
Either shyam is too expensive, or GPIL is too cheap, as they are in the same business!
And here is the investor presentation post Q2 results. Quite detailed about the update on strategic initiatives company is working on.
Investor Presentation Q2’FY23: https://www.bseindia.com/xml-data/corpfiling/AttachLive/dfac4a6e-0f88-47a1-a8ef-f8600a1f6ef2.pdf
Company seems to be on track to achieve what they are guiding for FY23 from trailing slide.
Also, slide with summary for production, sales and realizations
Sales and Production capacity is increasing whereas realizations have taken hit on account of the export duty.
@Kumar_manas - Since we are 1.5 months into Q3’FY23, you track the prices quite closely. Have we noticed the reduction in realizations in Q3(beginning) vs Q2 for the products sold for GPIL
what I understand is steel products are having nearly zero margin as of now (all steel cos reported loss) because of high coal prices.
The money they are making right now is because of high grade pellets only.
The biggest plus is they got nod to increase pellet capacity near the end of last quarter.
So, this quarter should be 15-17 EPS.
Iron ore is zooming today, expect it to cross 100 USD soon.
Next quarter can be 25 EPS (solar plant, beneficiation plant will also be ready + 100% high grade pellet).
So, it is trading at 4 PE at bottom of cycle plus it has 500 cr cash plus the mining capacity will be 2x in 3 yrs, and 4x in 6 yrs.
What is the estimated incremental power cost savings?
Solar PV plus Turbine replacement - 100 crs EBITDA in annual savings
Any update on reversal of export duty on iron ore pellets and steel?
