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Reeling under the impact of high input and interest costs, Jindal Steel and Power Ltd (JSPL) reported an 8 per cent profit growth for the June quarter, despite higher sales.
JSPL's net profit stood at Rs 470.16 crore for June quarter as against Rs 435.69 crore in the year-ago period. Total turnover grew 19 per cent to Rs 2,526.53 crore for the quarter as against Rs 2,121.60 crore in the year-ago period.
The company reported a 2 per cent decline in consolidated net profit at Rs 933 crore (Rs 956 cr in June quarter last fiscal) despite a 31 per cent increase in sales at Rs 3,940 crore (Rs 2,998 crore).
Cost not passed on
“We couldn't pass on the rising input cost to consumers as steel prices remained stable due to the suppressed demand,” said Mr Sushil Maroo, Deputy Managing Director and Group Chief Financial Officer, JSPL. The interest burden went up by 78 per cent to Rs 132.47 crore due to increased borrowing costs.
Coking-coal costs for the company ranged from $265 to $325 a tonne as against $175 a tonne past year. The company commissioned three units of 135 MW each during the quarter and expects to add another 945 MW in remaining quarters.
The JSPL scrip shed about 3 per cent to close at Rs 613.50 on the BSE. Mr Maroo said the company would be looking to raise about Rs 1,000 crore through term loans to fund its expansion. Gross debt of the company stood at Rs 13,000 crore as of June quarter.
The global operations of JSPL achieved a breakeven during the quarter. As against a loss of Rs 40 crore, overseas units in Oman and Bolivia reported a profit of Rs 11 crore during the quarter, Mr Maroo said.
JSPL expects a subdued demand for steel products and expects the prices to remain under pressure in the current quarter. Higher interest rates are affecting the spending on infrastructure projects, resulting in suppressed demand for steel, Mr Maroo said.
Mr Naveen Jindal, Executive Vice-Chairman and Managing Director, has been elevated as Chairman and Managing Director of the company, while Ms Savitri Jindal has been re-designated as Chairperson Emeritus. However, Ms Jindal will continue as a director of the company, a statement said.
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