(Bloomberg) -- JSW Steel Ltd.'s quarterly profit plunged 38% from a year earlier, but India's most valuable steelmaker was confident it had turned a corner as domestic steel demand showed signs of rebounding from recent lows.
- Group net profit fell to 15.9 billion rupees ($216 million) in the three months to September from 25.6 billion rupees a year earlier, it said Friday in an exchange filing. It beat analyst estimates of 9.7 billion rupees. Sales rose 9.6% from a year earlier to 192.6 billion rupees.
Key Insights
- JSW Steel rebounded from a loss in the quarter ended June, when the country's growth contracted 23.9% as economic activity ground to a halt after India imposed one of the world's strictest lockdown. Authorities have failed to get the pandemic under control since then, with the number of coronavirus cases exceeding 7 million, second only to the U.S.
- Rural demand and exports spearheaded a revival in consumption of the mill's products last quarter.
- JSW's crude steel production recovered in the July-September period, to 3.85 million tons, little changed from a year ago, after tumbling 30% in the previous quarter.
- The company has been boosting its liquidity. In October, the company raised 40 billion rupees in bonds.
- The mill's U.S.-based unit, Periama Holdings, also said it's considering various financing options including an international offering of U.S. dollar denominated bonds of as much as $1 billion to repay part of the debt it owes JSW.
Market Reaction
- JSW's shares closed 1.3% lower on Friday before the results were announced. The stock is up 19% this year.
- Analysts have 15 buy recommendations on the company, 9 holds and 8 sells, according to data compiled by Bloomberg.
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