Jindal Stainless Ltd, India’s largest stainless steel player, has cut down export guidance following the Red Sea crisis, and prevailing demand slump in Europe and the US. From 15 per cent-odd, the company is now expecting exports to be in the range of 12-13 per cent of its turnover volumes.

However, the full-year guidance has not been revised and the company is looking at a volume growth of 20 per cent in FY24, with EBITDA per tonne being in the range of ₹19,000-20,000, Abhyuday Jindal, Managing Director, told businessline.

Good domestic demand will likely make up for slowdown in export markets.

“There is an inching-up of freight rates and demand continues to be slower than expected, especially in Europe. The market has not picked up on expected lines. So, there will be some impact on exports and instead of the previously-anticipated 15-odd per cent, numbers would be around 12-13 per cent or so,” he said.

The crisis in the Red Sea has impacted shipping to Europe with delays of around 15-20 days. Circuitous routes are being taken to overcome these geo-political issues.

Jindal said, while “there will be some impact on exports in Q4”, it was too early to comment on whether the same would stretch out to Q1FY25 numbers.

“So, we cannot really give a time frame as of now. But if issues in the Red Sea gets resolved in the next couple of months, it may not have an impact in the coming fiscal. Right now, we are sticking to our annual guidance of 20 per cent volume growth, and demand in India continuing to be good, it is achievable,” he added.

The company, however, will continue to tap into the high-consumption European markets – specially in Spain, France, Portugal and Italy. It is expecting to complete the acquisition of 35 per cent stake in its Spanish subsidiary, Iberjindal SL, over the next couple of months. Valuation process to pick up the stake is underway. With this acquisition, Jindal Stainless hopes to enlarge its presence there. The subsidiary’s contribution to Jindal Stainless’ topline was around ₹143 crore for the December quarter.

Domestic to export mix for the company stood at 88:12 for the quarter ending December 31, 2023; and at 86:14 for the nine-month period (April to December).

According to Jindal, stainless steel demand in India continues to be on the rise, with growth being reported across key user-sectors such as auto, decorative pipes and tubes. The company began production at its newly acquired facility in Ghaziabad, looking to widen product offerings across segments like wire rods and re-bars (long products).

Focus continues to be on securing chrome and nickel mines, in India and overseas, as and when opportunities arise. The company’s nickel pig-iron facility in Indonesia is expected to be commissioned in early H1FY25. The facility is expected to reach full capacity in the three subsequent quarters.

Q3 numbers

On a standalone basis, the company reported a profit after tax (PAT) of ₹779 crore for the quarter ending December 31, 2023, up 41 per cent year on year compared with ₹552 crore in the year-ago-period. Revenues for the period under review stood at ₹9,088 crore, up 1 per cent year on year.

EBITDA improved 8 per cent on a y-o-y basis to ₹1,021 crore.

Sales volumes improved 9 per cent yoy to 512,015 tonnes, while declining 6 per cent sequentially on account of planned maintenance in the plants.

Net debt for the quarter was recorded at ₹3,085 crore, and net debt-to-equity ratio was 0.23. 

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