Jindal Steel & Power (JSP) on Tuesday reported Rs 1,622 crore consolidated net profit for the third quarter of the current financial year which is 33.52 per cent lower when compared with Rs 2,440 crore recorded in the corresponding quarter of the previous year.
The company’s net profit has declined sharply due to lower operating profit and higher tax expenses.
Jindal Steel & Power’s gross revenue rose to Rs 14,152 crore in the quarter ended December 2021 from Rs 10,449 crore recorded in the corresponding quarter of the previous year.
While Q3 FY22 witnessed a sharp improvement in domestic demand on a sequential basis, the quarter continued to be marred by unseasonal rains, lack of railway rakes and muted demand amidst rising COVID-19 cases, Jindal Steel & Power said in a statement.
Steel demand in India fell by 7 per cent year-on-year in the third quarter of the current financial year.
“JSP sold more domestically this quarter, reflecting the industry trend (domestic sales up 19 per cent sequentially, -6 per cent Y-o-Y). The government’s infrastructure push in the recent budget, increased rake availability and rising private capex should further boost domestic steel demand. This bodes well for JSP with two-thirds of its product portfolio catering largely to India’s construction and infrastructure sector,” Jindal Steel & Power said.
On a standalone basis, during 3Q FY22, JSP reported steel sales (incl. pig iron) of 1.82 million tonnes, which were lower than the production of 1.96 million tonnes due to logistical challenges encountered earlier and subdued domestic demand.
Export share for JSP declined to 23 per cent during the quarter (vs. more than 40 per cent share in the prior quarter). Higher internal consumption resulted in negligible external sales of pellets (8kt in 3Q FY22).
For the first nine months of 2021-22, JSP reported steel shipments of 5.56 million tonnes and production of 5.90 million tonnes.
Jindal Steel & Power reported consolidated gross revenues of Rs 14,152 crore and consolidated EBITDA of Rs 3,310 crore in the Q3 of 2021-22.
“Strong operational cash flows, declining finance cost, and lower capex have all contributed towards continuous deleveraging in 3Q FY22,” the company said.
Consolidated net debt has declined further to Rs 10,981 crore in 3Q FY22 (from Rs 11,164 crore in September 2021).