JSW Metal Ltd on Friday reported a pointy 86% drop in consolidated web revenue for the quarter ended 30 June at ₹838 crore, hit by excessive enter prices and a current obligation on exports. The Sajjan Jindal- led steelmaker posted a revenue of ₹5,904 crore in the identical interval final yr.
The corporate additionally trimmed its capital expenditure plan by ₹5,000 crore for this fiscal amid the risky market setting.
“The corporate’s capex spend was ₹3,702 crore in Q1 FY23, towards the deliberate capex spend of ₹20,000 crore for FY23. Contemplating the present market situations, the corporate expects to calibrate its capex spend to ₹15,000 crore for FY23,” JSW Metal mentioned in a press release.
“…excessive inflation and power prices are having some influence on home consumption. Coverage fee tightening by RBI and world central banks together with slowing world progress might influence near-term GDP progress,” the corporate mentioned.
JSW Metal’s consolidated revenues grew by 32% to ₹38,086 crore within the June quarter, from ₹28,902 crore a yr earlier. Nonetheless, in comparison with the March quarter, income declined 19%.
Metal gross sales for the quarter fell 25% sequentially to 4.49 million tonnes (mt).
“The home metal trade was hit by falling world costs, and the imposition of a 15% obligation on sure metal exports in Might 2022 additional exacerbated the state of affairs with a steep fall in exports, of 26% QoQ (quarter-on-quarter),” the corporate mentioned.
The export obligation on metal merchandise is predicted to be a brief measure to include inflation and could also be eliminated as soon as inflation cools down, JSW Metal mentioned, including that demand from automotive, development and infrastructure segments stays sturdy, which ought to help total metal consumption throughout this fiscal.
“India’s metal consumption in Q1 FY23 was 27.36 mt, down 5.6% QoQ, whereas exports fell 26% to 2.88 mt because of the weaker world demand and the imposition of export obligation,” the corporate mentioned.
JSW Metal reported an Ebitda (earnings earlier than curiosity, taxes, depreciation and amortization) of ₹4,309 crore within the June quarter, a 58% decline from ₹10,274 crore a yr in the past. Ebitda margin stood at 11.31%.
The corporate attributed the drop in Ebitda to decrease gross sales quantity, sharply increased coal and power costs, and unrealized mark-to-market loss on excellent international forex loans on account of a weak rupee.
The sharp fall in Ebitda resulted within the firm’s Ebitda/tonne falling by 68% from a yr in the past and 38% sequentially to ₹8,318 through the quarter, mentioned Kunal Motishaw, a analysis analyst at Reliance Securities, decrease than the brokerage’s estimate of ₹8,450.
He mentioned whereas JSW Metal reported sturdy realization as the corporate had revised its pricing contracts with choose auto clients upwards by ₹11,500-12,000/tonne for 1HFY23 as in comparison with 2HFY22 ranges, gross sales quantity was beneath estimate, placing excessive stress on Ebitda.
“Uncooked materials price/tonne rose considerably by 156% y-o-y and 15% q-o-q to ₹42,395. That is largely on account of coking coal. Energy and gas prices elevated by 87% y-o-y and 68% q-o-q to ₹8,980/tonne. Complete price/tonne elevated 51% y-o-y and 21% q-o-q to ₹68,866/tonne,” Motishaw mentioned in a word.
The corporate’s consolidated web debt-to-equity ratio stood at 0.98x on the finish of the June quarter, towards 0.83x on the finish of the March quarter.
Obtain The Mint Information App to get Every day Market Updates & Dwell Enterprise Information.
Extra
Much less
Supply: Live Mint