Expect EBITDA/tn to improve to Rs 8k/tn in H2FY17: Jindal Steel

The second quarter for Jindal Steel and Power is traditionally weak, says MD and CEO, Ravi Uppal. The EBITDA per tonne in the second quarter for the company was at Rs 6000/tonne.But the EBITDA/tonne for the second half of current fiscal will improve to around Rs 8000/tn. Uppal says steel prices have been hiked to compensate for higher cost of production due to rising input costs. Prices of raw materials like coking coal anf pellet have shot up.Below is the verbatim transcript of Ravi Uppal's interview to Latha Venkatesh, Sonia Shenoy and Anuj Singhal on CNBC-TV18.Latha: Steel realisations weak in Q2, how has the pricing changed from Q2 and if you can also tell us the impact of demonetisation?A: You are right that the realisations during Q2 had gone down. It went down by nearly Rs 1,800 per tonne on an average basis. This was a monsoon quarter. All the producers were producing to the full capacity. So it was a question of demand and supply.The second thing is that as far as JSPL is concerned, we also took major shutdowns in our plant in Angul and Oman. Therefore, we did not produce as much we should have done.Coming to Q3, things were started to look up.Anuj: The prices are up versus Q2 FY17 and is it simply cost push?A: There are a lot of factors, the coking coal prices have gone up, the pellet prices have gone up. So the cost of production has gone up. Therefore some of it has to be passed onto the market that doesn’t mean that it is adding to our margins is merely a recovery of cost. Having said that, I would say the margins have improved and I am sure that you should see better numbers in Q3.Sonia: What was your EBITDA per tonne in Q2 FY17 and what is your target for the second half of the year?A: In Q2 the EBITDA was coming to close to about Rs 6,000 per tonne average and I do foresee that it should go up to about Rs 8,000 in Q3.