JSPL is the stock on the radar after global metal prices trade weak in Shanghai for as second day as an increase in global inventories weighs on commodities.
Sharing his outlook on prices and business going forward, Naushad Akhter Ansari, CEO-Steel Biz, JSPL told CNBC-TV18 that domestic steel prices are expected to rise by Rs 1500-2000 per tonne in the near-term on back of rise in raw material prices.
However, margins may remain at current levels because even though prices are going up the cost push is also higher.
There is no threat from imports due to increased prices because it is not exorbitant and is justified, said Ansari.
A meaningful increase in Angul plant capacity will only happen after basic oxygen furnace (BOF) is commissioned, which is likely by middle of this month, he said.
On the business outlook, he said despite higher working capital requirements because of better management of working capital, we don’t require debt.
With regards to capacity utilisation, he said in the next quarter Raigad will be operating close to 100 percent capacity that is 3.4-3.5 million tonnes and with regards to Angul once the BOF is commissioned, the capacity would go up to 5 million tonnes but by end of this financial year it would run at 60 percent of the capacity. So, the EBITDA per tonne should increase by Rs 1000/tonne going ahead. Currently, it is around Rs 9000/tonne, said Ansari.
Therefore, meeting Rs 950 crore quarter interest payment will not be an issue from here on because there are also other plants operational to make sure that debt level is maintained at a comfortable level. We are also looking at monetising some non-core assets to pare debt.
With regards to sale of power assets, he said the deal with JSW Energy is still on the table.
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