JSW Steel posts record profit of ₹5,900 cr in Q12 min read . Updated: 23 Jul 2021, 10:43 PM IST
- Revenue from operations more than doubled to ₹28,902 cr in the quarter
MUMBAI: JSW Steel Ltd, India’s most valuable steelmaker, reported a record profit of ₹5,900 crore for the fiscal first quarter amid a surge in the prices of the alloy.
The company had reported a loss of ₹582 crore in the corresponding quarter of the previous year.
Revenue from operations more than doubled to ₹28,902 crore in the three months ended 30 June from ₹11,782 crore in the year-ago period. A nationwide lockdown to stem the spread of the covid pandemic crimped the company’s sales in the first quarter of last fiscal.
Earnings before interest, taxes, depreciation and amortization (Ebitda) came in at ₹10,274 crore, with an Ebitda margin of 35.5%. Ebitda is a measure of a company’s profitability.
Prices of hot-rolled coil used to make automotive frames, railway tracks and pipes rose more than 19% to around ₹10,000 per tonne, according to Edelweiss Securities.
Saleable steel sales for the quarter stood at 3.47 million tonnes as the company increased exports by 14% quarter-on-quarter to partially offset the fall in domestic demand due to the second wave and seasonality.
During the quarter, the steel major spent ₹2,688 crore on capital expenditure. It plans to spend a total of ₹18,000 crore on capital expenditure in FY22. The company’s stock rose 0.12% to ₹717.40 on BSE on Friday.
The company’s board approved entering into a power-purchase agreement to procure wind and solar power with special purpose vehicles set up by JSW Energy Ltd under the group captive scheme.
“This will supplement the power requirements at the Vijayanagar, Dolvi and Salem steel complexes and will also go towards meeting the company’s renewable power obligations. JSW Energy Ltd will be setting up these renewable power facilities with an installed capacity of 958MW," the company said in a press statement, adding that the group captive scheme allows a waiver of the cross-subsidy surcharge and requires the procurer to hold 26% equity in the power supplier.
“Accordingly, JSW Steel will invest ₹445 crore, equivalent to 26% of the equity in the respective SPV of the renewable projects to be set up by JSW Energy in the respective states of JSW Steel’s plants, as per the group captive norms," it said.
JSW’s coated steel business is commissioning additional colour coating lines at Vasind, Kalmeshwar, Vijayanagar and Srinagar as the colour coated steel market is expected to witness strong growth over the next few years.
“The paint firms in India have limited expansion plans in coil coatings that are consumed by the firm’s colour coating business. It is important for JSW Steel to strategically secure coil coating supplies for colour coated steel, which is a profitable downstream value-added product," the company said, adding that its paints division, JSW Paints Pvt. Ltd, has scaled up in two years and is supplying over 90% of the company’s paint requirements. The facility is strategically located in western India, with the ability to further scale up the existing facility as well as add capacities, it said.
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