Jindal Stainless is eyeing a 20 per cent volume growth, primarily driven by domestic demand across sectors like auto, railways and others. The EBITDA (earnings before interest, tax, depreciation and amortisation) guidance is around ₹18,000–20,000 per tonne, similar to last fiscal.
Key export markets -such as Europe continues to see depressed demand, while the US is still grappling inflation – are yet to recover on expected lines.
According to Abhyuday Jindal, Managing Director, Jindal Stainless Steel, there is a product/offering specific demand in European markets, for instance, hot rolled products; as compared to cold rolled ones. Over-all demand is yet to recover.
Volume contribution from exports is pegged between10 and 15 per cent range for the current fiscal, almost same as last fsical’s 13 per cent level, in view of the ongoing geo-political tensions and economic conditions.
The push would also be to explore alternative overseas markets such as Mexico, South America and Middle East, so as to make up for volume losses in European markets.
“So there is a concerted volume push and overall numbers are up. In Q4 where the impact of the Red Sea crises, and other geo-political events played out on margins... if there are no margins we will not export,” he said adding: “.
Margins in Q4FY24 (Jan – Mar) took a hit and was at ₹14,500 per tonne, substantially lower than the full year average of ₹18,500 per tonne. In view of the Red Sea crisis pushing up shipping costs , and increasing the number of transit days by almost two-weeks, the hit on the bottomline was ₹50 – 60 crore for the fiscal.
Q4 & FY24 numbers
Jindal Stainless saw its consolidated net profit dip 30 per cent y-o-y to ₹501 crore for the period ending March 31, 2024. Net profit in the year ago period was ₹716 crore. Revenue from ops declined 3 per cent to ₹9,454 crore during the period, as against ₹9,765 crore in the year-ago-period.
For the fiscal, net profit was at ₹2,693 crore, up 29 per cent y-o-y, whereas revenue from operations was at ₹38,562 crore, up 8 per cent over the previous year. The Board has recommended final dividend payment of ₹2 for FY24, taking the total dividend payment to ₹3 i.e. 150 per cent per equity share of face value ₹2 each.
Cap-ex Plans
According to Jindal, the company has earmarked a capex of ₹4,700 crore for FY25, which includes ₹800 crore of spill-over capex (from last fiscal), apart from ₹500 crore being spent on scheduled maintenance.
Funded mostly from internal accruals, the capex will be used for acquisition of Chromeni plant in Gujarat, an Indonesian JV and other brownfield expansion projects.
The capex is a part of the larger expansion plan that the company announced earlier this months. The idea is to augment capacities by 40 per cent to 4.2 million tonnes per annum, over a three-year-period.