BUSINESS

The net profit of JSW Steel drops by 64.5% to Rs 1,299 crore

Due to rising costs and raw material prices, industrialist Sajjan Jindal’s JSW Steel reported a 64.5% decline in net profit for the quarter that ended on March 31, coming in below market predictions.

 

For the same quarter in the previous fiscal year, the steelmaker reported a net profit of Rs 3,664 crore. According to a statement from JSW Steel, the steel manufacturer’s revenue for the reporting quarter decreased 1.5% to Rs 46,269 crore from Rs 46,962 crore reported in the same period of the previous fiscal year.

The company’s EBITDA dropped from Rs 7,939 crore to Rs 6,124 crore, a 22.9% decrease.

The board of JSW Steel also suggested paying a dividend of Rs 7.30 per share for FY24, or a total of Rs 1785 crore.

Both the company’s sales and net profit fell short of market estimates. JSW Steel was expected to report net profit of Rs 1,661 crore on sales of Rs 44,676 crore and EBITDA of Rs 6,155 crore, according to a consensus estimate by Bloomberg analysts.

The company’s costs increased to Rs 44,401 crore during the review period (from Rs 43,170 crore a year earlier), while the cost of raw materials used increased to Rs 24,541 crore (from Rs 23,905 crore) and other expenses increased to Rs 7,197 crore (from Rs 6,653 crore).

According to JSW Steel, capacity utilisation at its Indian operations dropped from 93% to 94% from Q3 of last year, while the company’s consolidated crude steel output for the quarter decreased by 3% to 6.79 million tonnes.

The company’s net debt as of March 31 was Rs 73,916 crore, down Rs 5,305 crore from December 31, 2023, primarily as a result of strong cash flow, working capital release, and carefully planned capital expenditure.

6.73 million tons of steel were sold during the quarter, a 12% QoQ and 3% YoY increase. Due to higher imports, domestic sales, which were 5.16 million tons, decreased by 5% YoY and 2% QoQ.

Industrial volumes and original equipment manufacturers had an 11% quarterly decline, despite a QoQ increase in overall sales volumes. Retail sales decreased by 3% YoY but increased by 16% QoQ.

The board of JSW Steel also authorized the $73.75 million purchase of Minas de Revuboe Limitada (MDR), which is the owner of a coking coal mine in the Moatize Basin in Tete Province, Mozambique.

The statement said that MDR has premium hard coking coal projects worldwide with reserves over 800 million tonnes, indicating that this is a step toward backward integration for captive sourcing of coking coal.

JSW Steel’s stock price increased by 2.36% on Friday, closing at Rs 907.30 on the BSE. Out of the thirty Sensex equities, it had the second-best performance.

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