JSW Steel posted strong results, yet again in the latest September quarter. The steel major’s profit grew several-fold thanks to the jump in sales revenue. This was despite the increase in its raw material cost.

Helped by higher sales volumes (up 22 per cent to 3.82 million tonnes), JSW Steel posted 20 per cent increase in operational income to ₹14,421 crore in the September 2016 quarter. Higher sales to export markets, particularly of value added products, boosted revenue. Value added products account for about a third of the company’s sales volumes. Export of such products expanded 67 per cent (year-on-year) in the latest September quarter.

The company had reported six successive quarters of declining income (year-on-year) since the December 2014 quarter followed by meagre growth in the June 2016 quarter. The last time the company posted high double-digit revenue growth was in the June 2014 quarter.

In a break from the past seven successive quarters of declining raw material cost, the company faced higher outgo in the September 2016 quarter. This was on the back of higher coking coal and iron ore prices. Some of the cost increase was however passed on in the form of hikes in steel prices, as has happened in international markets too.

Put together, this helped JSW Steel report operating profit of ₹2,959 crore in the September 2016 quarter. This was 65 per cent higher than that in the comparable quarter last fiscal. Net profit too multiplied nearly 13 times to ₹727 crore in the September 2016 quarter, compared with the year-ago period.

With the company ramping up production at its plant at Dolvi in Maharashtra and a likely improvement in construction demand in the post monsoon season, a healthy growth in sales volumes is expected in the second half of the fiscal.

Related Topics
comment COMMENT NOW