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JSW Steel swings to profit

JSW Steel swings to profit
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First Published: Wed, Jan 20 2010. 11 42 PM IST
Updated: Wed, Jan 20 2010. 11 42 PM IST
Mumbai: JSW Steel Ltd, the $3.5 billion (Rs16,100 crore) company that is part of the OP Jindal Group, swung to a a profit of Rs514.23 crore in the quarter ended December, after a loss of Rs127.50 crore in the same period in 2008.
The profit was driven by higher sales and lower input costs, following a recovery in domestic demand.
Profit for the December quarter increased 13.88% compared with the September quarter’s Rs451.54 crore.
Revenue doubled compared with the previous year as the company sold more of higher quality rolled steel, Seshagiri Rao M.V.S., joint managing director and group chief financial officer, said at a media briefing in the city on Wednesday.
“There is good demand for long products as the construction and industry demand has picked up. But we could have done better this quarter if floods has not affected our plants in south India,” he said.
JSW’s crude steel production has increased to 536,000 tonnes in the quarter under review, against 420,000 tonnes in the September quarter.
Bhavesh Umesh Chauhan, metals analyst with SMC Securities Ltd, said JSW’s profits were better than his expectations but added that the company faces cost headwinds due to higher prices of coal and iron ore, the two main inputs in making steel.
He warned of margin pressures next year because JSW depends on imports for these inputs. The firm imports 40% of its iron ore requirements.
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First Published: Wed, Jan 20 2010. 11 42 PM IST