BackJSW Steel posts Rs656.49 crore profit in Q1
Consolidated revenue rose 28.9% to `13,067.48 crore in the April-June quarter
Premium
Mumbai: India’s third largest steel maker JSW Steel Ltd on Friday reported consolidated net profit of ₹ 656.49 crore for the June quarter against a loss of ₹ 381.82 crore a year ago.
Consolidated revenue rose 28.9% to ₹ 13,067.48 crore in the April-June quarter.
A Bloomberg poll of analysts had estimated net profit at ₹ 482.3 crore on revenue of ₹ 13,428.6 crore.
Shares of JSW Steel closed 0.50% down at ₹ 1,173.95 apiece on BSE.
In its outlook statement, the company said despite a weak March quarter and a less optimistic outlook for several emerging market economies, the world economy is expected to grow at 3.4% in the calendar year—up from 3.2% in calendar year 2013.
“During first half of the calendar year 2014, global steel production grew by 2.5% y-o-y (year-on-year) which appears to be commensurate with global steel demand forecast of less than 3% for calendar year 2014. The regional HRC (hot rolled coil) prices, with the exception of North America marginally softened in the second quarter of calendar year 2014, mirroring continued softness in raw material prices and steel exports from China and Korea remain at elevated levels. However, steel prices are likely to remain rangebound amidst broad based steel demand growth expectation for calendar year 2014," the company said.
JSW Steel has a capacity of 14.3 million tonnes (mt) across two integrated steel plants in Maharashtra and Karnataka and is the third largest Indian steel maker behind Tata Steel Ltd and Steel Authority of India Ltd (SAIL), with an expansion strategy spanning organic and inorganic means.
In the past decade, the company rapidly expanded its steel making capacity, but could not secure captive iron ore mines which has hurt its raw material supply and therefore it has been campaigning for better availability of the mineral in the backdrop of regulatory and legal action on several key mining states such as Odisha, Goa and Karnataka.
JSW Steel had net debt of ₹ 34,014 crore at the end of 31 March, and a debt to equity ratio of 1.54. At the time of announcing the fiscal 2013-14 fourth quarter results, Seshagiri Rao, joint managing director and group chief financial officer, said the company plans a capital expenditure of ₹ 3,300 crore to expand its Dolvi unit in Maharashtra that would include a debt of ₹ 2,200 crore.
At that time Rao also said the company would convert ₹ 3,400 crore of rupee debt into a foreign currency one and would seek shareholders’ nod for raising debt in the capital or bank market. Therefore, the total fund raising would come to ₹ 5,600 crore, but no timeline was given.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
