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On the back of better price realisations and improving efficiencies, Jindal Steel and Power Ltd (JSPL) reported a 54 per cent increase in standalone net profit for the quarter ended December 31, 2010. Net profit for the quarter stood at Rs 501.93 crore against Rs 325.62 crore in the corresponding quarter last year.
Net sales were Rs 2,410 crore, an increase of 35 per cent (Rs 1,780 crore).
Commenting on the results, Mr Sushil Maroo, Group Chief Financial Officer and Director, Jindal Steel and Power, said, “During the quarter, some new capacities were added, efficiencies were seen to be improving and the steel market had also picked up which has resulted in JSPL posting its highest ever quarterly profits.”
“Price realisation during the quarter for steel had been 12-13 per cent higher than the corresponding quarter last year, however, price realisation for merchant power was down by about 20 per cent,” he added.
Mr Maroo said the company was largely protected from the input-cost rise but not totally insulated from it. “To a certain extent, we were protected from the rise in cost of coking coal and iron ore. We import all of the coking coal we require, so we were also partially affected by the rising cost pressure,” he said.
Commenting on whether the company's coking coal supply is affected by the flooding in Australia, Mr Maroo said, “There has been no impact this quarter because we had sufficient inventory. The latest news says that water is receding in Australia, so in another three weeks time the supply should improve.”
JSPL is plans to ship iron ore from its facility in Bolivia. Mr Anand Goel, Joint Managing Director, JSPL, said that the company plans to sell the iron ore from Bolivia to markets near the region itself, as shipping it to India is not financially viable.
The company expects steel prices and the prices of the raw materials to stabilise at the current levels.
JSPL's scrip closed at Rs 699.25 on the BSE on Monday, a marginal increase of 0.04 per cent over the previous close.
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