Brokerages are expecting Jindal Steel & Power Ltd (JSPL) to report a drop in net profit for the March quarter, compared to the corresponding quarter last fiscal.  

However, the earnings before interest, tax, depreciation, and amortisation (EBITDA) could see sequential improvement primarily because of better realisations and volumes. 

On the flip side, coking coal and iron ore prices were on the higher side, offsetting some of the gains in volume sales and realisations. 

Also read: JSPL to commission new rail mill at Angul at an estimated cost of ₹3,000 crore

Sales volume growth is likely to be constrained by the truckers strike in Odisha, leading to supply chain bottlenecks in case of iron ore, said an ICICI Securities report. 

Recessionary pressures

There is also pressure on overseas coal prices for the company, impacting consolidated numbers. 

The benefits of lower coking coal prices and softening in iron ore prices are expected to come in Q1FY24 onwards, most market sources said. 

Overseas steel demand continues to be depressed because of recessionary pressures in some key markets, and lower demand in South East Asian regions. 

In an April report, ICICI Securities said, it was expecting EBITDA margin of all the players to improve further QoQ on higher realisation and lower to flat coal cost.

“Ferrous players look better placed considering the improving spot spreads and better traction in the domestic market,” it said, despite underwhelming demand recovery from China.