Jindal Steel And Power Q2 Results: Profit Surges Six Times On Lower Costs, Beats Estimates

Revenue was down 9.4% at Rs 12,250.2 crore vs Rs 13,521.4 crore over the same period last year.

<div class="paragraphs"><p>High quality round bars (Source: Jindal Steel &amp; Power website)</p></div>
High quality round bars (Source: Jindal Steel & Power website)

Jindal Steel and Power Ltd.'s net profit rose in the second quarter, beating analysts' estimates.

The OP Jindal Group-owned steel manufacturer's profit increased 6.3 times to Rs 1,390.1 crore in the quarter ended September, according to an exchange filing on Tuesday. That compares with the Rs 1,078.7 crore consensus estimate of analysts tracked by Bloomberg.

JSPL Q2 FY24 Earnings Highlights (Consolidated, YoY)

  • Revenue down 9.4% at Rs 12,250.2 crore vs Rs 13,521.4 crore (Bloomberg estimate: Rs 12,585.4 crore).

  • Ebitda up 18.35% at Rs 2,285.7 crore vs Rs 1,931.4 crore (Bloomberg estimate: Rs 2,364.8 crore).

  • Ebitda margin at 18.66% vs 14.28% (Bloomberg estimate: 18.8%).

  • Reported profit up 6.34 times at Rs 1,390.1 crore vs Rs 219.3 crore (Bloomberg estimate: Rs 1,078.7 crore).

Consolidated crude steel production grew 4.4% to 1.9 million tonne, while consolidated steel sales remained flat at 2.01 MT. The decline in revenue was on account of a 9.4% decline in realisation.

The surge in profit was driven by reduced costs, supported by strong volume. The cost of materials consumed declined 2.8% to Rs 4,463 crore, while other expenses fell 15.6% to Rs 3,944 crore.

Share of value-added products increased to 67% from 63% in the year-ago period.

The company has started production at the Gare Palma IV/6 coal mine in Chhattisgarh, with reserves of 167 MT. This mine is expected to support the proposed expansion of its Raigarh integrated steel plant to a capacity of 9.6 MT per annum from the existing 3.6 MTPA.

The company plans to increase its crude steel capacity to 12.9 MTPA by the current fiscal and further to 15.9 MTPA by the next fiscal from the current 9.6 MTPA. This will be driven by doubling capacity at its Angul facility to 12.3 MTPA, from 6 MTPA currently. JSPL plans to spend Rs 5,600 crore each in fiscal 2024 and 2025 to fuel this expansion.

"We expect the demand to be robust in the second half of the current fiscal as India continues to march to a different drumbeat," Managing Director Bimlendra Jha said.

Shares of JSPL closed 1.53% lower at Rs 633.8 apiece before the results were announced as compared with a 0.32% decline in the NSE Nifty 50.