Metals major Jindal Steel & Power Ltd (JSPL) reported a 51 percent decline year-on-year in its consolidated net profit for the quarter ending December 31 at around Rs 951 crore, even as revenues inched slightly up, and both production and sales increased during the quarter. The company noted that India remained a net importer of steel during the quarter, which impacted pricing and realisations for steel manufacturers in India.
The consolidated revenue rose slightly year-on-year to around Rs 11,751 crore, while the adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined by nearly 24 percent year-on-year to Rs 2,133 crore. The company said that EBITDA per tonne during the quarter of Rs 11,209 was lower on a sequential basis, owing to the impact of higher iron ore prices. In a post-earnings call with investors, JSPL's management said iron ore prices are expected to moderate in the ongoing quarter.
Steel production for the quarter was 1.99 million tonne, up by 2.5 percent on-year, while sales increased by 5 percent over the same period to 1.90 million tonne, the company said in a press release. JSPL's management said that 59 percent of its sales during the quarter were long products, higher on a sequential basis, as the company consolidated its position as a longs-heavy player.
JSPL has been favoured by investors due to its mostly-long product presence, with the company being one of the preferred suppliers of rails to the Indian Railways, as well as a number of metro railway projects in India. The management added that it saw a dip in flat product prices during the quarter, while those of long products, including those used in infrastructure projects such as TMT, showed strength during the quarter.
The management added that it has outlined an additional capital expenditure of Rs 15,000 crore till FY28. While the new capital expenditure is not expected to add any new steel manufacturing capacity, the management said that the spending will be directed towards projects that produce more value-added products and increase efficiency, so as to achieve better sales realisations and EBITDA per tonne.
JSPL said that some of the expected investments include a 400,000 tonne per annum- cold rolling mill, a galvanising line, and a colour coating line, each with a capacity of 200,000 tonnes per annum. Investments will also be made on infrastructure such as slurry pipelines and logistics, directed towards both of the company's major Raigarh and Angul facilities.
With the company in the final stages of commissioning its 6 million tonne per annum (MTPA) expansion at its steel plant in Angul, JSPL's net debt has continued to increase. Its net debt stood at Rs 13,551 crore at the end of the October-December quarter, against Rs 12,464 crore as on September 30, 2024. During the quarter, JSPL spent Rs 2,857 crore by way of capital expenditure, mostly at its Angul facilities, with the new blast furnace there expected to be commissioned by the ongoing quarter, with full ramp-up seen by the end of FY26.
The company declared its financial results after market hours. At the close of trading on Thursday, Jindal Steel & Power's shares closed nearly 2 percent lower at Rs 832.10 apiece on the National Stock Exchange.
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