JSPL may narrow loss to Rs 433 cr in Q1 on strong revenue and operational numbers

Jindal Steel & Power (JSPL) is likely to cut its losses to Rs 433 crore in June quarter, from Rs 1,082 crore in same quarter last fiscal. It may be led by volume growth and operational performance.

Revenue from operational is seen rising 28.7 percent year-on-year to Rs 5,992 crore while operating profit is expected to increase 39 percent to Rs 1,370 crore and margin may expand by 180 basis points to 22.9 percent in the quarter ended June 2017.

Steel deliveries are expected to grow by 5 percent to 10 percent on year-on-year basis. Analysts expect additional production from blast furnace in June to add to the volumes.

Improved realisation for longs is expected to be the key driver of earnings. Analysts expect steel EBITDA per tonne to stable stable on sequential basis with a positive bias.

Analysts expect an improvement in Jindal Power's generation, aided by good seasonal demand. Lower coal prices and higher seasonal merchant prices may drive margins higher.

Net loss is expected due to higher depreciation and interest charges.

Key issues to watch for would be ramp-up of Angul facility and power demand growth.