JSW Steel logs highest-ever quarterly net profit of Rs 7,179 crore in Q2

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October 22, 2021 1:00 AM

During the quarter, JSW Steel’s capacity utilisation across its steel-making operations stood at 91%. While recovery is on track, JSW Steel has cautioned that high inflation and re-emergence of Covid-19 cases could present risks to economic recovery.

Despite the capex on expansion, JSW Steel’s consolidated net debt to equity stood at 0.92x at the end of the quarter, against 1.04x at the end of Q1 FY2022. Leverage (net debt to EBITDA) stood at 1.58x, as against 1.89x at the end of Q1 FY2022.Despite the capex on expansion, JSW Steel’s consolidated net debt to equity stood at 0.92x at the end of the quarter, against 1.04x at the end of Q1 FY2022. Leverage (net debt to EBITDA) stood at 1.58x, as against 1.89x at the end of Q1 FY2022.

The Sajjan Jindal-led JSW Steel on Thursday reported its highest-ever quarterly revenue from operations at Rs 32,503 crore and net profit of Rs 7,179 crore for the quarter ended September 30, as demand for value-added products remained robust. In the comparable quarter last year, the company’s revenue stood at Rs 19,264 crore and net profit at Rs 1,595 crore.

During the quarter, JSW Steel’s capacity utilisation across its steel-making operations stood at 91%. While recovery is on track, JSW Steel has cautioned that high inflation and re-emergence of Covid-19 cases could present risks to economic recovery.

Saleable steel sales for the quarter stood at 3.83 million tonne (Indian operations excluding JVs), an increase of 10% sequentially. As a result, the company registered its highest ever consolidated quarterly operating EBITDA of Rs 10,417 crore, with an EBITDA margin of 32%. In October, the company commenced integrated operations of its 5 MTPA brownfield expansion at Dolvi.

The company spent Rs 3,639 crore as capex during the quarter, against total planned capex of Rs 18,240 crore for FY2022. The 5 MTPA brownfield expansion at Vijayanagar is on track. The downstream expansion projects at Vijayanagar, Vasind and Tarapur are in advanced stages of implementation.

Despite the capex on expansion, JSW Steel’s consolidated net debt to equity stood at 0.92x at the end of the quarter, against 1.04x at the end of Q1 FY2022. Leverage (net debt to EBITDA) stood at 1.58x, as against 1.89x at the end of Q1 FY2022.

With high capacity utilisation rates, the company is optimistic about the second half of the fiscal. With demand for automobiles, solar and appliances remaining robust, JSW Steel clocked healthy volumes for its value-added and special products, taking its share of VASP to 60% from 51% in Q2 FY2021. Demand for value-added products was driven by domestic and export demand for coated products.

During the quarter, the performance of Bhushan Power & Steel (BPSL) improved significantly, driven by an increase in sales volumes. The share of profit from JVs for the quarter stood at Rs 603 crore, an increase of 86% from Rs 323 crore in Q1 FY2022.

The company remained optimistic about the outlook in India, as construction, automobile and infrastructure projects are expected to gain momentum following a steady ramp-up in vaccination. Also, easing of Covid-19 restrictions have led to a strong bounce-back in economic activity. The company said recent high frequency economic indicators are reflecting improvement in business sentiment, especially since late August/ early September.

The government’s initiatives and benign longer-term trends are likely to aid revival of investment growth in India, JSW Steel said in its statement.

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