The Hindu Business Line : Input cost vs price line hits JSW Steel

In a bind: Mr Sajjan Jindal (right), Vice-Chairman & Managing Director, JSW Steel Ltd, and Mr Seshagiri Rao, Director Finance, at a press conference in Mumbai on Monday. - Paul Noronha

Our Bureau

Mumbai, May 5 Caught between rising raw material cost and compulsion to hold the price line, JSW Steel has reported a 11 per cent increase in net profit at Rs 461 crore (Rs 413 crore) for the quarter ended March 31, 2008.

Income was up 64 per cent to touch Rs 4,256 crore in the fourth quarter against Rs 2,579 crore logged in the same period last year. Gross profit was up 9 per cent at Rs 934 crore (Rs 899 crore). Price realisation in the fourth quarter was up nine per cent at Rs 2,600 a tonne, while it rose eight per cent to Rs 2,300 a tonne in fiscal 2008.

During the quarter, saleable steel output went up 20 per cent to 3.4 million tonnes (mt). The company has expanded its steel billets and blooms capacity from 0.3 mt a year to 1 mt a year and rolled products capacity from 0.3 mt a year to 0.45 mt a year at Salem Works. The company has commissioned a 30-MW captive power plant at Salem.

To hold on

Mr Sajjan Jindal, Vice-Chairman and Managing Director, said, “The only way out to hold the price line amidst unprecedented cost pressure would be to focus on volume growth, product mix and to improve the efficiency.”

JSW Steel Ltd has announced a reduction of hot-rolled coil prices by Rs 500 a tonne while galvanised product prices were reduced by Rs 750 rupees a tonne.

Dividend

The company has announced a dividend of Rs 14 (140 per cent) per equity share for the year ended March 31, 2008. Together with the corporate tax on dividend, the total outflow on dividend amounts to Rs 306.37 crore against Rs 233.73 crore paid last year, an increase of 31 per cent. The company’s shares on BSE were down 1.9 per cent at Rs 899 on Monday.

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