Jindal Stainless has earmarked Rs 4,700 crore capex for the current fiscal, up from Rs 3,800 crore in FY24, Managing Director Abhyuday Jindal said in media call on May 15. The increase in capex provision comes as the company bets on the booming domestic demand with plans of more brownfield expansions during the period.
The FY25 capex includes Rs 800 crore spilled over from last year. The company plans to fund the majority of the capex through internal accruals. When asked where the funds will be used in the year, chief financial officer Anurag Mantri said, "The capex will be largely used for the Chromeni acquisition, Indonesia Joint Venture and more brownfield expansions."
Recently, the company announced acquisition and expansion plans to the tune of Rs 5,400 crore to augment its melting and downstream facilities in order to reach a capacity of 4.2 million tonnes per annum (MTPA).
This included a 49 percent partnership in a joint venture for a 1.2 MTPA stainless steel melt shop in Indonesia, expansion in downstream capacity in Jajpur and Odisha, and acquisition of a 54 percent equity stake in Chromeni Steels in Mundra, Gujarat.
The group's consolidated net profit declined 30 percent YOY to Rs 501 crore hit by negative inventory valuation due to falling nickel prices, the company said in a regulatory filing on May 15.
Nickel accounts for 40 to 50 percent of the company's raw material cost, according to the management.
The margins came under pressure also due to subdued demand in the key export markets, namely, Europe and United States. "We see some recovery in certain pockets in Europe.. we will not export if there is no margin," said Jindal adding that the company is pushing volumes into Mexico, South America and Middle East to grow footprint.
Jindal Stainless expects FY25 EBITDA per tonne between Rs 18,000 crore and Rs 20,000 crore.
Red Sea crisis pushing up costs
According to the management, the Red Sea issue spiked the ocean freight rates four times and increased the shipping time, causing the company to lose some customers. "The cost impact to the bottom line was about Rs 50 crore to Rs 60 crore since December," said Mantri.
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