MUMBAI – JSW Steel saw its consolidated net profit plunge by more than 64% to Rs 867 crore in the June quarter weighed down by lower prices of steel, some inventory losses, planned shutdowns and higher interest costs.
The country’s largest steelmaker produced 6.35 million tons of steel at a consolidated level during the quarter, down 1% from the previous year and 6% sequentially due to planned maintenance shutdowns at Dolvi and Bhushan Power.
As a result, capacity utilization at its operations in India stood at 87% during the quarter, compared to 92% a year ago.
“Elevated imports particularly from China and FTA countries pose a challenge to the domestic steel industry,” the company said in a statement. The company exported 10% of its output from India during the quarter, down from 15% a year ago.
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While consolidated sales volume during the quarter rose 7% on year to 6.12 million tons, it was 9% lower as compared to the March quarter. JSW Steel has guided for production of 28.40 million tons, and sales of 27.00 million tonne on a consolidated basis in the current fiscal.
Consolidated revenue, meanwhile, rose less than 2% on year to Rs 42,943 crore. The growth in sales was lower than that of the sales volumes because net sales realization for operations in India fell 5% on year.
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Operating profit during the quarter stood at Rs 5,510 crore, while margins were at 12.8%. The profitability was down by nearly 22% on year. It was 10% lower as compared to the previous quarter mainly driven by lower sales volumes and certain one offs including inventory valuation impact, the company said.
Interest costs increased 6% on year because of higher debt.
The flagship company of the JSW group had a net debt of Rs 80,199 crore as on June-end, up from Rs 73,916 crore as on March-end. Its net debt-to-operating profit ratio stood at 3 times.
