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Informist, Thursday, Jan. 30, 2025

By Arya S. Biju

MUMBAI – Flat revenue growth coupled with a double-digit fall in other income, and higher expenditure driven by purchases of stock-in-trade and depreciation dragged down Jindal Steel & Power Ltd.'s net profit for the December quarter. The company's bottom line marked the highest on-year fall in seven quarters despite revenue growing marginally on year. The quarter also marked the lowest on-year growth in the company's top line in the last nine years. However, both the revenue and the profit numbers were better than expected.  

The company's consolidated net profit declined 50.7% on year to INR 9.50 billion. This was, however, higher than Street's estimate of INR 9.11 billion. The company's consolidated net sales rose marginally to INR 117.51 billion from INR 117.01 billion a year ago, beating analysts' estimate of INR 115.08 billion. 

For the nine months to December, the company reported a consolidated net profit of INR 31.52 billion, down 37% on year. The company's consolidated revenue for the period was INR 365.82 billion, up marginally from INR 365.40 billion. The company said it has appointed Mayank Gupta as the chief financial officer effective Thursday. With this, Sunil Agrawal, who currently holds the position, will step down, Jindal Steel said in an exchange filing.

The steelmaker's production and sales volumes were both up on year and on a sequential basis. During the quarter, Jindal Steel produced 1.99 million tonnes of steel, higher than 1.94 million tonnes it had produced a year ago and the 1.97 million tonnes produced in the September quarter. The company sold 1.9 million tonnes of steel in the December quarter, up from 1.81 million tonnes sold a year ago and higher than 1.85 million tonnes sold in the previous quarter. In the nine months to December, the company produced 6.01 million tonnes of steel, up from 5.88 million tonnes produced a year ago. The company sold 5.85 million tonnes of steel in the period, higher than 5.66 million tonnes sold in the same period a year ago. 

The company's total expenses for the quarter rose nearly 8% on year to INR 105.78 billion, driven by a 17% rise in the cost of purchase of stock-in-trade and around 10% rise in depreciation and amortisation. The company reported INR 4.70 billion as the cost of purchase of stock-in-trade for the quarter and INR 6.98 billion as depreciation and amortisation expense. The cost of raw material, however, saw an on-year fall of 3% to INR 46.52 billion.

The company had a tax outgo of INR 2.49 billion against a tax credit of INR 10.4 million a year ago. The tax expense for the previous quarter was INR 3.53 billion. As of Dec. 31, the company had a consolidated net debt of INR 135.51 billion, up from INR 91.15 billion a year ago.

The company's adjusted earnings before interest, tax, depreciation, and amortisation for the quarter fell 24% on year to INR 21.33 billion. The company's EBITDA for the quarter was adjusted for a one-off foreign exchange gain of INR 510 million. For the nine months ended Dec. 31, the adjusted EBITDA was 70.88 billion. The adjusted EBITDA per tonne for the quarter was INR 11,209 down from INR 15,472 reported a year ago. 

The company incurred a total capital expenditure of INR 28.57 billion for the quarter. This was largely driven by the expansion projects at Angul, Jindal Steel said. The company added 1,450 new dealers in the quarter, taking its dealer count to 4,700. The infrastructure segment of the company contributed 43% to the company's sales for the December quarter, up from 40% in the year-ago quarter. Sales from the distribution segment were flat on quarter but fell 200 basis points on year to 31%. The engineering and packing segment contributed 12% to sales for the quarter, while the building and construction segment contributed 11%.  

Thursday, shares of the company closed at INR 840.05 on the National Stock Exchange, down 1.1%. The company announced its Oct-Dec earnings post-market hours.   End

Edited by Akul Nishant Akhoury

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