Geopolitical issues - including strife in West Asia - have hit exports of Jindal Stainless Ltd with freight rates shooting up 3x - 4x across geographies. Moreover, there has been an absence of containers, most of which have been “cornered by China”, says Abhyuday Jindal, Managing Director of the company.

The company has revised export guidance to 10 per cent of total sales, lower than last year’s 15 per cent.

“Export markets continue to be challenging. The Red Sea crises and strife between Israel and Iran are having their impact. So, we foresee that there will be flattish growth until some respite happens in the coming two quarters. In select markets, particularly in the European region, freight rates which were up 2x are now up by 3x and 4x times. Moreover, there is container shortage with China cornering majority of the supplies which has again affected the market and us,” Jindal told businessline during an interaction. 

The company is also unable to pass on the cost increase and has so decided to restrict export supplies, “until there is visible improvement”. 

Some of the European economies which were seeing green shoots - like Germany and France - have failed to sustain or rebound. 

“We have taken a conscious call to go a bit slow on some European markets since economic rebound has not been on expected lines. Also, we are now tapping new markets like Japan, Middle East, South Korea; while there are chances of us ramping up presence in Canada if they act on Chinese dumping through tariffs,” Jindal said adding that the company’s focus will be towards larger presence in the domestic markets. 

The Q2FY25 export volume of Jindal Stainless was consistent with its Q1 levels. While volumes increased in the US, Middle East and South Korea, exports to the EU declined due to slower end-user demand and higher shipping costs.

Increased presence in new markets however is still not enough to make up for drop in exports across key European nations. 

For H1 (April - September) FY25, exports were at 10 per cent of total sales; 15 per cent on the year-ago-period. 

“For the full fiscal, we are looking to keep exports to 10 per cent of total sales. Domestic market is seeing good demand,” he said. 

In Q2FY25 (July - Sept), standalone net revenue stood at ₹9,746 crore, up 0.26 per cent YoY versus ₹9,720 crore; while EBITDA at ₹1,007 crore, down 6 per cent YoY from ₹1,070 crore. The PAT was at ₹589 crore, down 3.30 per cent YoY from ₹609 crore. 

Domestic demand

Domestic demand has been better, driven primarily by end-user industries such as consumer durables, automobiles, railways, and infrastructure. 

“We see some improvement in local sourcing with some MNCs reaching out to us for increased supplies. Moreover, automobile sales this Diwali is better than last year. So overall yes, domestic market continues to do good,” he said. 

On Chinese dumping of stainless steel, Jindal said, the company including the stainless steel association was in touch with the Centre. Meetings are currently underway. 

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