New Delhi: Steel pipemaker Jindal Saw Ltd said on Monday it will demerge its investment division into a new subsidiary, which will be listed on the country’s two main stock exchanges.
The company also posted a 31% drop in net profit for July-Sept., as lower demand for pipes resulted in a significant drop in sales.
Profit for the quarter stood at Rs 100 crore, compared with a profit of Rs 144 crore a year back. Sales fell 42% to Rs 800 crore.
The “quarter witnessed lower production and sales, especially for large diameter pipe. Some of the dispatches in September 2010 quarter were withheld due to heavy rains in north India which leads to increase in stocks,” the company said in a statement.
It added that subsequent quarters are expected to perform better than the latest quarter.
As of 31 October, Jindal Saw’s order book stood at $780 million.
Jindal Saw plans a capital outlay of Rs 350 crore for its ductile iron plant with an additional waste heat recovery-based power project and coke oven plant, it said.
Additionally, it estimates an outlay of about $60 million for a greenfield ductile iron pipe facility in the United Arab Emirates.
“Ductile iron pipe demand will be a function of water-related infrastructure investments... Considering the increasing competition in domestic market, the company is setting up ductile iron pipe project in UAE,” Jindal Saw said.
Shares of Jindal Saw, which the market values at about $1.4 billion, closed up 1.4% at Rs 227.60, in a weak Mumbai market.