Amreli Steels (ASTL), still in the red amid weak construction demand

Amreli Steels (ASTL) is set to post another quarterly loss of Rs788 million in 4QFY25 (April–June), with a loss per share (LPS) of Rs2.65. This adds up to a full-year FY25 loss of Rs3.6 billion, highlighting ongoing struggles.

What’s going wrong?

• Low capacity use: Production is running at less than 20%.
• Sales expected at Rs4.1 billion, down 24% YoY.
• Despite a slight recovery in exports, local demand stayed very weak.
• High finance costs continue to hurt earnings, even with falling interest rates.

Full-year performance snapshot:

• Revenue: Rs17bn (↓56% YoY)
• Gross Profit: Rs433mn (↓82%)
• Net Loss: Rs3.6bn
• LPS: Rs12.28
• No dividend expected for FY25.

Outlook:

The company’s path to recovery depends on two things:

1. Loan restructuring to bring down finance costs.
2. A rebound in construction activity, which is still lagging behind.

Investment perspective:

With high losses and no payout, ASTL remains a high-risk investment. However, analysts expect a turnaround in FY26 if demand picks up and borrowing costs ease. ASTL’s forward P/E is estimated at 8.7x FY26F, but no dividend is expected next year either.

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Source: JS Global

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →