Jindal Steel and Power Ltd (JSPL) reported a marginal decline in consolidated net profits despite a 43.5 per cent growth in revenues for the September quarter over corresponding last year.
This is due to the write-off of Rs 74 crore losses relating to copper and diamond mining and exploration in Congo during the quarter, said Mr Sushil Maroo, Group CFO, JSPL.
On a standalone basis, JSPL reported a net profit of Rs 395.7 crore on revenue of Rs 3,333.8 crore as against a net of Rs 478 crore on revenue of Rs 2,299 crore in corresponding last quarter.
JSPL reported a 29 per cent growth in sale of steel products and 23 per cent rise in power sale during the quarter. The sale of iron ore pellets shot up 2,346 per cent as the company commissioned a 5 million tonnes a year in Barbil, Orissa, during the quarter. JSPL plans to sell the pellets in the domestic market, where it sees strong demand continuing.
Input costs
Raw material costs more than doubled to Rs 1,318 crore from Rs 642 crore in line with the company's top-line growth. Also JPSL's strategy to import iron ore pellets from its plant in Oman resulted in higher costs. Weakening of rupee and the rising interest rates hurt the company's profits. Interest costs were up 60 per cent to Rs 125.5 crore as against Rs 78 crore in corresponding last quarter.
The JSPL scrip shed 1 per cent to close at Rs 515 ahead of the company's results on Tuesday.
Steel business accounted for 70 per cent of company's revenue and 60 per cent in profits, while the rest came from power business. JSPL expects the demand for steel to pick up in the seasonally strong December and March quarters, Mr Maroo said.
The company plans to raise Rs 2500 crore in debt, which has already been tied up, over the next two quarters. JSPL plans to commission 7 units of 135 MW by end of current fiscal.
Two of the three units commissioned in the past three quarters were yet to stabilise. Heavy rains in Eastern India during the quarter affected the quality of coal, which in turn brought down the plant load factor in two units to less than 50 per cent, Mr Maroo said.
Mr Maroo expects the merchant power tariffs to firm up close to Rs 4 per unit next year. For the September quarter the company realised an average tariff of Rs 3.75 per unit.