The Hindu Business Line : `Stainless steel prices likely to be volatile'

Jindal Stainless has declared its third quarter results, wherein its net profit was up at Rs 113 crore against Rs 20.9 crore in the corresponding quarter of the previous year. The company's third quarter income was at Rs 1,554.9 crore compared with Rs 785.6 crore, year-on-year.

Mr V.S. Jain, Managing Director and CEO of the company, says that their nine-month profit stands at Rs 260 crore against Rs 130 crore. He said that stainless steel prices are likely to be very volatile. He added that nickel prices have gone up significantly, and this will affect stainless steel as well.

Excerpts from CNBC-TV18's interview with Mr V.S. Jain:

What growth in volumes and realisations has led to this big jump?

We have just announced our results for the quarter and profit after tax is Rs 113 crore against Rs 21 crore in the corresponding period of the last year. On accumulative basis, for nine months, the profits have just doubled; it is Rs 260 crore against Rs 130 crore for the nine-month period. So, the performance for the quarter is reasonably good and we are all quite thrilled.

How much has the growth in realisations been this quarter round?

Our total gross sales have increased by about 97 per cent and gross sales increased from Rs 785 crore to Rs 1,544 crore. Net sales (after removing excise duty) is Rs 1,445 crore against Rs 707 crore. It is about a 104 per cent increase.

What has that taken your operating profit margins to?

Operating profit margins are about 151 per cent higher. Operating profit before interest and depreciation is Rs 231 crore against Rs 92 crore in the corresponding quarter of the previous year.

How much of recovery have you seen in stainless steel prices and where do you expect them to hold for the next quarter?

Prices are very volatile, in fact, nickel prices in recent days have gone up and today the market is highly volatile.

Where you expect them to hold for the next three months or so in terms of prices?

It is difficult to say how the market will behave. We believe the prices could remain stable, but there could be an impact on account of the nickel price increase.

As someone who has been watching the steel industry and understands it, how have you read the government's move to cut the customs duty? Do you expect that to impact sales or demand in anyway?

We feel any measures to contain inflation is welcome. But we are hoping, because nickel prices, and, particularly the scrap in the nickel, which is not available in the country, the existing level of duties on these items also need some consideration. That's because nickel prices are so high, the domestic industry will feel highly uncomfortable at that level of prices.