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New Delhi, February 4, 2020: The Board of Directors of Jindal Stainless Limited (JSL) today approved the financial results of the Company for Q3FY21. A V-shaped recovery in stainless steel demand in the domestic markets bolstered JSL’s sales volume to 250,562 tonnes in Q3FY21. The Company’s profit after tax (PAT) and EBITDA stood at INR 152 crores and INR 445 crores respectively. Continuous and accelerated deleveraging, along with interest rate rationalisation, helped bring down the interest cost by 16% over corresponding period last year (CPLY) to INR 117 crores during Q3FY21.
The Indian economy gained momentum and registered a faster than expected recovery after the peak COVID-19 period in 2020. The third quarter witnessed healthy revival in end-user segments like automotive, pipes & tubes, and industrial fabrication. Backed by R&D efforts to indigenize various stainless steel grades in the automotive sector, JSL was able to capitalize on the demand growth in the two-wheeler and passenger vehicle segments. Aided by the second wave of its nationwide co-branding initiative ‘Jindal Saathi’, the Company registered nearly 40% growth in the ornamental pipe & tube segment during the quarter. Sales in the Hollowware segment grew by ~40% in Q3FY21 as compared to previous quarter. JSL’s sales in the railway wagon and metro rail segments also remained strong during the quarter.
The global stainless steel market saw escalation of raw material prices throughout the quarter. Over the six-month period of July-December 2020, Nickel prices jumped by ~40%, while prices of Molybdenum, Copper and Ferrous Scrap grew by nearly 27%, 24%, and 45% respectively. Additionally, the shipping cost for imported raw materials went up by 30-35% in comparison to the pre-COVID period, resulting in higher landed cost of raw-materials. Steadily increasing input costs had a direct bearing on the prices of stainless steel. With imports constituting nearly 27% of domestic stainless steel consumption, and input materials imported from global sources, the domestic prices of finished goods remained inevitably linked with the prevailing international prices.
The domestic-export share of sales volumes during the quarter, on a YoY basis, was as follows:
|Geographical Segment||Q3FY21||Q3FY20||% Change|
Other key developments:
CARE Ratings upgraded JSL’s rating to ‘CARE BBB+’ with a stable outlook, based on its bank facilities/debt instrument. The agency pointed to a better-than-expected recovery in the Company’s operational performance and has found JSL’s consistent debt reduction as one of the major reasons for this rating upgrade.
Financial performance summary:
Figures in INR crore(s)
On a 9-month basis, 9MFY21 PAT stood at INR 127 crores, while EBITDA was INR 882 crores. Sales volume was recorded at 569,726 tonnes and net revenue of the Company was INR 8,275 crores.
Commenting on the performance of the Company, Managing Director, JSL, Mr Abhyuday Jindal, said, “Buoyed by increasing demand in auto, P&T and hollowware sectors, the outlook for the domestic stainless steel market remains strong. However, the recent budget announcement for suspension of trade remedial measures will allow free flow of subsidized stainless steel products in the Indian market, which is a big setback for the domestic industry, which is already operating at 60% of its capacity. It is even more hurtful for the MSME sector, which caters to over 35% of the domestic stainless steel market. We are hopeful that the government will review its decision to help Indian manufacturers compete on a level‑playing field, and give real impetus to the ‘Atmanirbhar Bharat’ mission.”