The growth was due to a greater proportion of value-added products in the sales mix, lower global prices of coking coal and greater use of captive coking coal and pellets at the Dolvi plant, said JSW Steel joint managing director and chief financial officer Seshagiri Rao.
The steelmaker posted a turnover of R13,067 crore in April-June, 29% higher year-on-year but 7.2% lower sequentially. Lower revenues quarter-on-quarter were on account of a softening in prices during April-June due to the general election and the subsequent new government, which hit demand.
A Bloomberg consensus of JSW Steels earnings had pegged net profit at R476 crore and turnover at R13,440 crore.
Operating profit margin for the June quarter stood at 21.3%, 260 basis points higher than in the corresponding period of the previous year. According to Rao, JSW Steels ebitda per tonne of steel stood at R8,500 during the quarter.
Rao said demand was likely to be subdued in the current quarter owing to the monsoon. However, in the second half of the current fiscal, it was likely to pick up significantly, with the new governments thrust on areas like construction, infrastructure and an uptick in automobile sales.
On July 31, JSW Steel shareholders approved a proposal to pay a firm owned by chairmans wife, Sangita Jindal, a brand licence fee for using the JSW brand. The fee, linked at 0.25% of the net profit of the company, works out to be around R30 crore for the June quarter. Explaining the rationale behind the decision, Rao said that since the JSW Group had grown into a conglomerate with interests ranging from steel to generation to sports, there was a need to centralise and standardise the branding and marketing initiatives of the different businesses.