Very good results from the company considering the big negative development due to export duty.
The most commendable thing is the volume growth they have been able to deliver despite the big negative development due to export duty.
Concerns that I could think of:
- Realisation was about 11,500 for this qtr. Export duty came in around end of may and hence the fall in realisations would be visible in Q2. Given the scenario today, fall would be steep of 20-25% and perhaps net profit will fallen even more.
- Given the export duty, I think GPIL will now go for integrated steel plant so the large capex outlay will start.
- The export duty was very steep – personally I feel govt has made it clear that they don’t want to export natural resource – iron ore to promote steel making in India. I don’t think the export duty will be rolled back fully…it will be probably reduced to 20-25%. If so, it’s a long term negative.
I have been a huge fan of GPIL however the govt move to impose such a steep duty was like a black swan event to my mind and I sold quite a bit of my position 
Disc: invested with a small allocation, sold over last few weeks.
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