JSW Steel Q4 net profit up on strong demand, retail sales

Moneycontrol Bureau

JSW Steel Monday posted 32% rise in fourth-quarter net sales to Rs 7,209.35 crore on back of robust domestic demand and continuous focus on retail sales, but higher total expenditure saw the company's bottom line rising at a less-than-proportionate pace. The steel maker's fourth-quarter (January-March) net profit rose 30% to Rs 794 crore and said better product-mix and higher volumes were the key factors for the strong performance of the company in the fourth quarter of 2010-11. JSW Steel's FY11 net finance cost declined after the company pre-paid part of its loans and also due to interest income gained from investment of surplus funds. This saw the company's weighted average interest cost of debt declining to 7.58% from 8.08% as on March 31, 2010. The company also said it will commission a new 10 million tonne steel plant in the next quarter at Vijaynagar and that it is targeting steel output at 9 million tonne in FY12. JSW Steel's board has also approved brownfield expansion at its Vijayanagar Works at Rs 2,695 crore to tap the growing demand for steel in India. The project will increase crude steel capacity to 12 million tonne per annum from the current 10 mtpa. The expansion work will be completed by June 30, 2013, the company said in the press release.  The above project will be financed by internal cash accruals of Rs 945 crore and the balance through debt. JSW Steel full-year (April-March) net profit was at Rs 1,754 crore compared with Rs 1,597 crore during the same period last year. Its net sales rose to Rs 23,900 crore from Rs 18,957 crore a year ago. The company also announced a dividend of Rs 12.25 per equity shares. Shares of JSW Steel closed at Rs 922.15, down 1.41% on the Bombay Stock Exchange.