Volumes to increase in Q4: JSW Steel

In an interview with CNBC-TV18, Seshagiri Rao, Jt MD and Group CFO, JSW Steel, talked about the company's third quarter earnings and shared his outlook going forward.Below is the transcript of Seshagiri Rao’s interview with Kritika Saxena on CNBC-TV18.Q: How would you evaluate your Q3?A: In spite of reduction of NSR by 24 percent in this year-on-year and 8 percent in this quarter, in spite of iron ore prices being higher, still we are able to show, in spite of shut down, we are still able to show an EBITDA of Rs 3,443. It is very good performance from that point of view. Lower cost, increased volumes, change in product mix and the capital cost is not going up, overall debt is not going up, this all together, there is a big upside for JSW going forward.Growth is there in India. In entire world, the demand is falling. So, this is quite positive from the Indian steel industry point of view. Only problem we are facing today is imports. Imports are coming at dumping prices, at predatory prices, hurting the domestic industry, hurting the country. Therefore, we have been appealing to the government, they should take steps expeditiously, because this is a step only government can take. Even though industry is quite competitive, we are able to compete in the market, but this unfortunate imports which are coming from Japan, Korea and China, their dumping steel at any price, that is causing a huge amount of distress in the steel industry. I think that is required to be addressed.Q: Keeping that in mind, keeping the fact that the steps taken by the government have not really shown as a positive benefit for individual companies, keeping this Chinese volatility in mind, and even keeping in mind the fact that demand is fairly better in India, by when are you expecting a recovery? Will the pressure continue for the foreseeable quarters for Q4 specifically. And by when can you see some kind of a turnaround operationally in terms of volumes, in terms of margins, in terms of the overall performance?A: As regards to the steps which the government of India has taken, we are thankful to them. Government of India in my view has to take a comprehensive view to curtail the imports which is intended to hurt the domestic industry. Comprehensive step in the sense that they have to take measures across the value chain, across all the steel grades, putting one grade of steel, any restriction, then there are 511 items in the chapter 72, various grades, then there is a circumvention.Q: What is the outlook as you step into the next couple of quarters? There are volatile times across the board, so what right now is the outlook in the next immediate quarter?A: January to March quarter, our volumes will be higher. Higher than the Q3. So, therefore, our volume guidance, the way we have given earlier, assuming that this entire incremental capacity will be available for the entire quarter. That is available only for two months. That is why we have reduced our guidance for this year by 5-6 percent. But, next year, entire 18 million tonnes will be available for the full year. So, there could be a significant volume growth for FY17.