JSW Steel states Profit of Rs. 2,773 crore due to high domestic demand

 JSW Steel states Profit of Rs. 2,773 crore due to high domestic demand

In New Delhi: JSW Steel Limited, which is helmed by Sajjan Jindal, recorded a net profit of $2,773 crore for the September quarter on Friday as opposed to a net loss during the same period previous fiscal year. 

The Mumbai-based steel producer stated in an exchange statement that its consolidated operating revenue increased by 6.71% year over year to 44,584 crore.

The company's combined Ebitda (earnings before interest, taxes, depreciation, and amortization) for the quarter was 7,886 crore, with an Ebitda margin of 17.7%.

JSW Steel highlighted the government's focus on infrastructure, where expenditure was up 48% YoY FYTD August, and the improvement in consumer mood, which has been driving investments, for the robust performance. It claims that the nation's capex-driving infrastructure, energy transition, defense, and PLI programs are all gaining significant momentum.

"Steel production and consumption remain strong, supported by government capital expenditures and a generally strong economy," it was stated. Consolidated crude steel production increased by 12% YoY during the quarter to 6.34 million tonnes. During the quarter, the Company shut down some of its Indian operations for maintenance; as a result, the average capacity utilization was 89%. At the Ohio, USA operations, capacity utilization was lower because of unfavorable market circumstances.

Strong domestic demand and an improvement in the product mix accounted for the majority of the company's 5.49 million tons increase in domestic sales, which was an 8% YoY increase. The steel manufacturer's exports were 0.69 million tonnes, or 11% of its Indian businesses' revenues.

At the conclusion of the second quarter of the current fiscal year, the company's net gearing, or the ratio of net debt to equity, was 0.92 times. During the quarter, net debt grew to 69,195 crore. The business thinks that the increase in borrowings brought on by the merging of JSW Ispat Special Products Limited (JISPL) is the main cause of this.

3,816 crores were spent by the company in India for its combined capital expenditures (capex) during the second quarter of FY24. Consolidated expenditure for H1 FY24 was $7,996 crores as opposed to the 20,000 crores projected for FY24, the business said.

The firm produced 6.41 MT of crude steel overall in the three months that ended on September 30, 2023, and sold 6.39 MT of it. According to the company's forecast for FY24, production would be 26.34 Mt and sales would be 25 Mt.

Due to reduced volumes, unfavorable US market circumstances, and lower steel prices, JSW Steel's Ohio subsidiary in the US recorded an Ebitda loss of $29.4 million for the quarter. High volumes and lower net realizations had an adverse effect on performance during the quarter, with Italy's businesses reporting an Ebitda of Euro 8.9 million.

The 5 MTPA brownfield expansion at Vijayanagar is moving well, the business said in a statement providing updates on its different current projects. Civil construction has already begun at the site, and the project is anticipated to be finished by the end of FY24.

Today, the company's shares increased 1.8% from yesterday's closing to close at 662.80.