JSW Steel, which reported one of the weakest quarters in its history on October 21, is looking for a better second half of the financial year. The steel major is not only expecting receding cost pressures and improving margins but is also looking to maintain its volume guidance while keeping debt reduction plan intact.
JSW, which announced results for the second quarter that ended on September 30, expects to maintain volume guidance for the financial year 2022-2023 despite a sharp drop in export volumes in hopes of higher domestic demand. As per the company’s press release, exports were at 7 percent of total sales during the quarter with volumes falling 38 percent sequentially due to the imposition of an export duty in May 2022. The company has traditionally reported export volumes at 30 percent of the overall sales volume mix.
In a post-earnings interview with Moneycontrol, JSW Steel’s Joint Managing Director and Group CFO Seshagiri Rao, said, “We expect to stick to our volume guidance of 24-25 million tonnes for the financial year due to increased domestic market share. India’s consumption stood at 106 million tonnes in the previous financial year, it is now expected to be at 112-115 million tonnes by the end of the new financial year.”
Rao also expects better margin performance due to lower coking coal costs, iron ore costs, and power expenses.
On debt guidance, Rao expects net debt to be bought down by Rs 5,000 crore in the next two quarters. He added that the company could reduce net debt by Rs 1,500 crore in the first half of the financial year, “which could have been more had it been not for exchange rate fluctuation which impacted the foreign currency liability.”
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