Jindal Steel and Power shares fall 5% after weak Q1 results

Shares of Jindal Steel and Power Ltd slipped 5 percent to Rs 662.75 at 11:07 am on August 14, after the company’s June quarter net profit declined year-on-year (YoY).

The company’s quarterly net profit came in at Rs 1,686.94 crore in June 2023 down 14.4 percent. The company had reported a profit of Rs 1,970.13 crore in the year-ago period.

The company’s consolidated revenue from operations dropped 3.5 percent on year to Rs 12,588.34 crore during the quarter ended June from Rs 13,045.41 crore in Q1FY23. Total income dropped to Rs 12,643.63 crore in the first quarter. It stood at Rs 13,069.17 crore in the year-ago period.

On the operating front, earnings before interest, taxes, depreciation and amortization (EBITDA) stood at Rs 2,704 crore in June 2023 down 17 percent year on year. Its margin nosedived 550 basis points to 20.9 per cent as compared to 26.4 per cent in the same quarter last year.

During the quarter, Jindal Steel Odisha (JSO), a wholly owned subsidiary of JSP, commissioned its state-of-the-art pellet plant at Angul, which the company claims is a first in a series of units that will be commissioned over the next two years as the company marches forward to double the steel production capacity at Angul.

Furthermore, the sales stood at 1.84 metric tonne, up 6 per cent year-on-year and down 9 per cent quarter-on-quarter, driven by seasonally weak consumption in the domestic market. The share of exports remained flattish at 10 percent during the quarter vs 11 per cent in the fourth quarter of FY23.

The balance sheet continues to strengthen while supporting the on-going capex. The total capex for the quarter was Rs 1,899 crore largely driven by the Angul expansion projects, the company added.

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Bimlendra Jha, Managing Director of Jindal Steel & Power stated, “We have now achieved a significant milestone of successfully commissioning our state-of-the-art pellet plant at Angul. We have also signed mining lease for two thermal coal mines – Gare Palma IV/6 and Utkal C, which will lead to consistent availability of coal for our thermal coal requirements in DRI Kilns, Coal Gasification and Power Plants at lower costs.”

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