Monthly
Stainless Trivia
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| Q2FY23 Highlights |
|---|
| Standalone performance: Revenue at INR 3,448 crores; up by 1% YoY EBITDA at INR 295 crores; down by 41% YoY PAT at INR 181 crores; down by 46% YoY Sales volume registered at 183,421 metric tonnes Net lenders’ debt reduced to INR 952 crores Net debt-to-equity ratio improved to ~0.2 Consolidated performance: Revenue stood at INR 3,926 crores; up by 5% YoY EBITDA at INR 323 crores; down by 43% YoY PAT at INR 253 crores; down by 49% YoY |
Gurugram, November 4, 2022: Jindal Stainless (Hisar) Limited’s (JSHL) Board of Directors announced the Q2FY23 financial results today. The Company’s standalone Net Revenue, EBITDA, and PAT stood at INR 3,448 crores, INR 295 crores, and INR 181 crores respectively during Q2FY23. The net external debt of the Company reduced to INR 952 crores as on September 30, 2022, and its net debt-to-equity ratio improved to ~0.2. On a consolidated basis, JSHL’s Q2FY23 Net Revenue, EBITDA and PAT were recorded at INR 3,926 crores, INR 323 crores, and INR 253 crores respectively.
The Indian government’s decision to impose a duty on the exports of stainless steel products severely impacted JSHL’s international sales. During Q2FY23, exports accounted for 8% of JSHL’s total sales volume, down from 17% in the previous quarter. With an agile sales planning model, JSHL quickly adapted to the changed market dynamics and intensified its focus on domestic sales. Development and supply of niche value-added stainless steel grades and critical materials across various sectors aided this adaptive strategy. The Company registered a growth of nearly 54% in its domestic sales during Q2FY23 on QoQ basis. Demand was strong in the auto, lift and elevators, railway wagon, process industries, and ornamental pipe and tube segments.
During Q2FY23, raw material prices saw a downward trend, with Nickel prices falling by 24% QoQ and those of Ferro-chrome by 18% QoQ. This impacted the realization and profitability of domestic manufacturers, including JSHL.
Other key developments:
However, the imposition of export duty on stainless steel flat products has adversely impacted the Company’s international sales. It is noteworthy that the export duty has been invoked at a time when the domestic industry is struggling with continuous dumping of stainless steel imports from China and Indonesia, and JSHL stands unguarded from the challenges brought forth in this situation. The split of domestic and export volumes in JSHL’s total sales during Q2FY23 was as follows:
| Geographical Segment | Q2FY23 | Q1FY23 | Q2FY22 |
| Domestic | 92% | 83% | 86% |
| Export | 8% | 17% | 14% |
2. Update on JSL-JSHL merger: Post approval from the Shareholders and creditors of JSL and JSHL on April 23, 2022, both the Companies had filed the second motion petition with Hon’ble NCLT, Chandigarh. While hearing the second motion application on July 13, 2022, the Hon’ble NCLT has directed issuance of notice(s) to the sectoral regulator(s). The next hearing is scheduled for November 11, 2022. The Companies expect the merger process to be completed within the current financial year.
3. Renewable Energy and ESG update: JSHL successfully commissioned a 3.5 MW rooftop solar power generation project. The Company is set to become India’s first stainless steel manufacturer to install a Green Hydrogen Plant with an objective to reduce carbon emissions and achieve its Environmental, Social, and Governance (ESG) goals. In addition to this, the Company has set an organisational goal to reduce its carbon emissions by over 1 lakh tonnes in FY23 for the merged entity.
4. Projects’ update: The Company’s ongoing brownfield expansion projects of nearly doubling its Blade Steel capacity and nearly tripling its Precision Strips capacity are progressing as planned.
Financial Performance Summary (Figures in INR crores):
| Particulars | Standalone | |||||
|---|---|---|---|---|---|---|
| Q1FY23 | Q1FY23 | Change | H1FY23 | H1FY22 | Change | |
| SS Sales Volume (MT) | 183,421 | 3,448 | 295 | 505,890 | 494,516 | 2% |
| Total Revenue (net) | 5,442 | 4,815 | 13% | 10,779 | 8,656 | 25% |
| EBITDA | 411 | 711 | (42)% | 934 | 1,290 | (28)% |
| PAT | 189 | 363 | (48)% | 476 | 634 | (25)% |
| Particulars | Consolidated | |||||
| Q2FY23 | Q2FY22 | Change | H1FY23 | H1FY22 | Change | |
| Total Revenue (net) | 5,605 | 5,027 | 11% | 11,079 | 9,059 | 22% |
| EBITDA | 358 | 748 | (52)% | 907 | 1,349 | (33)% |
| PAT | 152 | 412 | 63% | 481 | 717 | 33% |
On a half-yearly basis, JSHL’s H1FY23 standalone sales volume stood at 315,593 metric tonnes, down by 7% over H1FY22. Net Revenue, EBITDA, and PAT of the Company were recorded at INR 6,519 crores, INR 611 crores, and INR 375 crores respectively. During H1FY23, JSHL’s consolidated Revenue, EBITDA and PAT stood at INR 7,380 crores, INR 660 crores and INR 561 crores.
Management Comments:
Commenting on the performance of the Company, Managing Director, JSHL, Mr Abhyuday Jindal said, “The Indian stainless steel industry has suffered a setback due to the export duty levied by the Indian government. This duty comes at a time when the domestic market is being dumped with substandard stainless steel imports from China and Indonesia. We have made several presentations to the government and are hopeful of remedial actions to support the struggling domestic industry. However, with an agile market strategy and and efficient alignment of oursales mix, JSHL continued to deliver strong volumes in the domestic market. We are cognizant of our environmental responsibility and are committed to help the nation prepare for a sustainable future.”