Jindal Stainless (JSL) has earmarked a capex of Rs 4,700 crore for FY25, a majority of which would be used for its proposed expansion plans. The rise in capex, from Rs 3,800 crore in FY24, is also on back of expectations of a rise in domestic demand, said MD Abhyuday Jindal.
JSL on Wednesday posted a 30% fall in consolidated net profit to Rs 501 crore for the fourth quarter, while its net revenue fell 3% to Rs 9,454 crore and Ebitda slid 10% to Rs 1,035 crore. The margins were under pressure on account of negative inventory valuation due to continuously falling nickel prices.
A consensus Bloomberg estimate was expecting a net profit of Rs 578 crore, on revenue of Rs 9,605 crore and an Ebitda of Rs 1,061 crore.
JSL intends to fund about 90% of the capex, including a spillover of Rs 800 crore from FY24, via internal accruals. The capex would be used for expansion of brownfield activities, completion of 54% stake in Chromeni Steels in Mundra and setting up of a 1.2 million tonne per annum (MTPA) stainless steel melt shop in Indonesia, Jindal said in a post-earnings conference.
“We are expecting a 20% rise in volume growth on domestic demand in this fiscal,” he said, adding that JSL would spend an additional Rs 500 crore as sustenance and maintenance capex.
Earlier, JSL had announced a capex of Rs 5,675 crore over three years, which includes major acquisition and expansion plans to hike capacity to 4.2 MTPA from 3 MTPA now.
The company’s board also announced a final dividend of Rs 2 for FY24, taking the total dividend payment to Rs 3 or 150% per share.
JSL’s key export markets, such as Europe and the US, remained weak, while the Red Sea crisis led to a steep hike in freight rates and constrained availability of containers, it said in a statement.
About 40-50% of total material cost is nickel, CFO Anurag Mantri said, adding the Ebitda per tonne margin guidance for FY25 is at Rs 18,000-20,000 crore. This was at Rs 18,558 crore in FY24.