Moneycontrol PRO
Access insightful & curated financial content with Moneycontrol PRO at just Re. 1/- per day. Use code PRO365.

JSW Steel results below par, to improve in FY16: Moody's

Subdued domestic demand and a surge in imports from China, Russia and Korea exerted pressure on steel realisations, and steel prices in India fell 26 percent between April 2014 and March 2015.

May 25, 2015 / 08:51 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

JSW Steel's results for the financial year ended March 31, were below expectations but are likely to improve in 2015-16, credit rating agency Moody's Investors Service said on Monday.

"JSW's sales volumes for FY2015 were 3 percent lower than we had expected. Lower steel realisations year-over-year and a muted correction in domestic iron ore prices led to an annual consolidated EBITDA of Rs 95.1 billion, which was 14 percent short of our estimates," said Kaustubh Chaubal, vice president and senior analyst. Moody's

Subdued domestic demand and a surge in imports from China, Russia and Korea exerted pressure on steel realisations, and steel prices in India fell 26 percent between April 2014 and March 2015.

By contrast, JSW's steel realisations fell by only 9 percent over the same period.

Looking ahead, domestic sales will drive growth at JSW in FY2016, Mr Chaubal said.

According to the report, India's steel demand in the current financial year, 2015-16, will be supported by the pick-up in sales for commercial vehicles.

JSW expects 7 percent increase in sales to 12.9 million tonnes (MT) during the current fiscal, it said.

In addition, cost pressures will likely ease during the year, it said, adding that while steel prices will remain under pressure, the cut in domestic iron ore and coking coal prices will help ease pressure on margins.

JSW also remains focused on easing margin pressure through cost remain under pressure, the cut in domestic iron ore and coking coal prices will help ease pressure on margins.

JSW also remains focused on easing margin pressure through cost reduction initiatives such as yield improvement, fuel efficiency, logistics and procurement, and shifts in the road/rail mix.

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark