Mumbai (Maharashtra) [India], Oct 24: JSW Steel, the flagship business of 14 billion dollar JSW Group, on Wednesday reported a standalone profit after tax of Rs 2,917 crore during the second fiscal quarter on revenue from operations totalling Rs 15,520 crore.
In Q2 of the previous financial year, the net profit was Rs 2,251 crore on revenues of Rs 19,707 crore. The operating earnings before interest, tax, depreciation and amortisation (EBITDA) in Q2 FY20 totalled Rs 2,796 crore with an EBITDA margin of 18 per cent as crude steel production was 3.84 million tonnes and saleable steel sales were 3.6 million tonnes.
“The current quarter performance was marked by a confluence of multiple headwinds — prolonged and severe monsoon impacting operations and logistics at Dolvi Works, weak demand environment, sustained tight liquidity conditions, certain planned shutdowns and a sharp correction in steel prices,” JSW Steel said in a statement.
Weaker activity levels on the back of muted investment spend, credit squeeze and a slowdown in the automotive sector resulted in overall subdued steel demand, it said.
To partially mitigate the headwind of weak domestic demand, the company tactically increased exports which surged by 68 per cent year-on-year to 1.09 million tonnes.
On the future outlook, JSW Steel said the domestic demand is expected to grow by 5 per cent in FY20. A better-than- normal monsoon bodes well for farm incomes and a potential uptick in rural demand.
Overall, supportive fiscal and monetary measures are likely to spur investment and consumer demand over the medium-term, said the company.
JSW Steel is one of the largest producers of steel products in India with an installed steelmaking capacity of 18 million tonnes per annum.