India-based Jindal Stainless’ December quarter (Q3) sales volume grew by 5pc from the prior year to 251,000mt and rose by 9pc from the previous quarter. The growth was attributed to V-shaped recovery in domestic stainless steel demand.
Cumulative nine-months sales volume fell by 18pc from the prior period to 570,000mt. About 79pc of total sales were domestic, rest exports. In Q3, 85pc was sold domestically, and 15pc was exported.
Sales in Q3 increased with demand revival from end-user industries including auto, pipes &tubes and industrial fabrication.
In Q3, nickel and chrome, the basic raw material for stainless steel witnessed a price rise. Average nickel prices were around $15,930/mt in Q3, up almost $480/mt or 3pc from 2019 levels. Fe chrome prices jumped to Rs68,775/mt, up Rs6,975/mt from the prior year.
The company stated that increase in raw material prices resulted in positive inventory valuation. Higher raw material prices were offset by lower stores, spares, power and fuel costs which declined 9pc each from the prior year.
Net revenue from operations in Q3 rose 9pc to Rs34.53bn ($473bn), up 9pc from both prior year and quarter. In nine-months, net revenue from operations dipped 16pc to Rs78.7bn from prior year. Profit after tax jumped 170pc in Q3 to Rs11.52bn from the prior year and up 55pc from the previous quarter. In nine-months, company reported PAT at Rs1.63bn, down 7pc from the prior year.
Reaction to Union budget
Jindal Stainless’ management reacted sharply to the Monday’s budget announcement that slashed duties on various stainless steel products and suspended trade remedial measures which could result in free-flow of subsidised stainless steel products into the domestic market. The management claims this would be a major setback for the Indian producers who are already operating at around 60pc capacity. Furthermore, the micro, small and medium enterprises are likely to suffer more as they cater to about 35pc of the domestic demand. JSL hopes that the government would review this decision and aid Indian manufacturers to compete on a level-playing field and push for Atmanirbhar or self-reliant mission.
($1 = Rs72.9)