The year 2015-16 at JSPL was one of cautious optimism. We exercised
caution during the year, because the external environment was volatile
and largely unpredictable. Internally, we successfully increased our
production capacity, improved process efficiencies and implemented
multiple initiatives to enhance our preparedness for JSPL''s resurgence
in the steel and power sector. We are today more equipped and confident
that our foresight is taking us towards the right direction. Bolstered
by enhanced capacities, efficient processes, and supportive government
policies, we are committed to take JSPL to a new height of operational
excellence, financial robustness and long-term sustainability.
Global economic recovery, during the year, remained sluggish, fragile
and uninspiring. In advance economies the recovery was modest and
largely uneven. The US economy performed with resilience, supported by
relatively easy financial conditions with strengthening housing and
labour markets. In the Euro area, robust private consumption, supported
by lower oil prices and easy financial conditions outweighed the
weakening net exports.
The scenario for emerging markets and developing economies is not very
encouraging either. China is on a rebalancing mode; it is navigating a
momentous but complex transition towards a more sustainable growth.
Given China''s important role in global trade, the rebalancing efforts
can have substantial spill-over effects, especially on emerging market
and developing economies.
India continued to be one of the most attractive economies by common
consensus. During FY 2015-16, the economy grew by 7.6% and the
government took considerable measures to usher in a culture of fiscal
consolidation. The government is focusing on across the board reforms
to spearhead infrastructure development in railways, roads and highways
as well as the power sector, to build a broad-based foundation for
accelerated socio-economic development.
In this context, it is pertinent to mention that the government''s Make
in India initiative has been a resounding success. It has encouraged
domestic entrepreneurship to compete at a global scale and even
attracted FDI to the country significantly. In the 17-month period
(October 2014 to February 2016) after the launch of Make in India, FDI
inflows have increased by 37% (Source: Ministry of Commerce and
The government has already announced its first list of 20 smart cities
that will offer smart solutions such as assured power and water supply,
sanitation and solid waste management, efficient urban mobility, robust
IT connectivity, e-governance, citizen safety, among others. The
government has also implemented the Ujwal DISCOM Assurance Yojana
(UDAY) for financial turnaround and revival of power distribution
companies (DISCOMs), which will ensure accessible, affordable and
available power for all. Besides, the government has also resolved the
issues regarding the transfer of mining leases and grant of forest
clearances to the winning bidders of coal blocks. The Deendayal
Upadhyaya Gram Jyoti Yojana (DUGJY) is also expected to provide
electricity to thousands of villages, languishing in darkness across
India. As one of India''s prominent player in the steel and power
business, we are encouraged by these initiatives; and see a larger role
for ourselves in the gradually improving steel and power scenario in
At JSPL, we have always been focused on the India-first strategy; and
our overarching objective is to take Indian expertise and
entrepreneurship to the global centre stage. We are aware that there
are short-term challenges in our journey; but we are steadily building
our overall resilience against headwinds to grow sustainably in a world
marked by volatility, complexity and uncertainty. As a part of that
strategy, we implemented multiple initiatives during the year.
We re-organised and re-engineered our business to optimise cost,
enhance capital efficiency and productivity of our workforce. We also
strengthened our consolidated steel production and sales significantly;
achieved breakthrough order and deliveries; focused on new product
development; and also accomplished important milestones in our power
business. It is indeed heart-warming to note that despite challenges,
JSPL is today among the frontrunners in the global steel domain.
During 2015-16, we have witnessed unprecedented challenges owing to
declining commodity cycle. We remained steadfast to the belief to
counter these challenges with resilience. This we reflected through our
strong operational performance. Our revenues stood at Rs.18,632 crore
and EBITDA at Rs.3,633 crore in the fiscal and we registered an EBITDA
margin of 19%.
We maintained growth in our steel production and sales volumes. But our
operating profit dipped owing to decline in Net Sales Realisation (NSR)
which continued to be under pressure due to unabated import of steel
from China, Korea and other countries for most part of the fiscal.
But the year 2015-16 ended on a positive note. We saw good recovery of
steel prices in the domestic market, which for the past 18 months had
slumped to an all-time low. Moreover, introduction of minimum import
price (MIP), also helped to curb the rapidly growing imports at
Our net profit was impacted on account of the additional coal levy of
over Rs.3,300 crore, arising out of the cancellation of coal blocks by
the Honourable Supreme Court of India; and enhanced finance cost due to
borrowing. More importantly, demand was stagnant for most of the year;
and the marginal demand growth benefited the importers. The indigenous
steel producers failed to become true beneficiaries of the fledgling
SOME OF OUR KEY ACHIEVEMENTS OF FY 2015-16:
Our steel melting shop at Raigarh facility produced a record 10,000
tonnes of crude steel in a single day. This exemplary production based
on DRI (Direct Reduced Iron) and hot metal is a testimony of our
operational excellence in steel making. This reiterates our commitment
towards setting new benchmarks in the steel sector.
We commissioned a 1.4 MTPA Rebar Mill in Sohar, Oman, the largest in
the Gulf and African Region. This enabled Jindal Shadeed to become the
largest integrated steelmaker in Oman with a 2 MTPA Steel Melting Shop
(SMS) and 1.4 MTPA Rebar Mill.
We dispatched India''s longest ever 260 metre rails to a dedicated
freight corridor railway line. Our ability to make the world''s longest
single piece rail of 121 metre length has received a reckoning as a
World Record. The commissioning of our head hardening rail facility in
Raigarh has made us India''s first and only private sector steelmaker,
manufacturing head hardened rails. In line with the Government''s Make
in India initiative, we are strategically positioned to participate in
the expansion of railway infrastructure in India and export our rails
to global customers. Our commitment to the credo of ''Making in India''
for India and the world is vindicated by our efforts to strengthen our
global presence and enhance exports to various countries.
Inspired by the vision of our founder Shri O.P. Jindal, we at JSPL have
always tried to integrate our business priorities with community
aspirations. Wide-ranging community initiatives have always been one of
the pillars of our holistic sustainability strategy. From community
healthcare and education to developing skill and vocational training
thereby generating sustainable livelihood options to promoting art and
culture, JSPL is committed to deliver consistently on the expectations
of the wider stakeholder fraternity.
When we look at JSPL today, we find that it has been a year of great
transition for the Company. I am confident that we will have a more
promising year ahead of us in view of the strategies we have
undertaken, the gradually developing positivity in our core operative
sectors; and India''s march towards inclusive growth and prosperity.
I seek the support and cooperation of all our stakeholders to
strengthen JSPL''s mandate to help create a progressive and prosperous