Mumbai: JSW Steel Ltd. Friday reported its results for the Third Quarter and Nine Months ended 31st December, 2020.
Key highlights for 3Q FY2021:
Crude Steel production: 4.08 million tonnes, up 6% QoQ
Saleable Steel sales: 3.90 million tonnes, lower by 5% QoQ
Revenue from operations: ₹19,239 crore, up by 15% QoQ
Best quarterly Operating EBITDA: ₹5,633 crore, strong margin of 29.3%
Net profit after tax: ₹2,829 crore, up 67% QoQ
Saleable Steel sales: 3.95 million tonnes, lower by 5% QoQ
Revenue from operations: ₹21,859 crore, up by 13% QoQ
Best quarterly Operating EBITDA: ₹5,946 crore, strong margin of 27.2%
Net profit after tax: ₹2,669 crore, up 67% QoQ
Reduced net debt by ₹1,099 crore
Net Debt/ Equity of 1.29x and Net Debt/ EBITDA of 3.53x.
There is a swift recovery in economic activity in India following the easing of lockdown restrictions and opening up of the economy. Various high frequency economic indicators are better than the initial expectations pointing to a robust recovery. Growth in passenger vehicles and motorcycle sales, railway freight traffic, and electricity consumption is also strong.
The domestic Steel industry witnessed sharp demand recovery driven by restocking and higher demand from automotive, machinery, construction and infrastructure sectors aided by increased government spending. Specific policy initiatives such as Production linked incentive schemes to encourage manufacturing in India and targeted stimulus packages to the MSME sectors.
On the back of this strong demand environment, JSW Steel improved average capacity utilisation level of ~91% for the quarter vs. ~86% in 2Q FY 2021. Crude Steel Production during the period stood at 4.08 million tonnes and Standalone Saleable Steel sales at 3.90 million tonnes.
The domestic sales volumes stood at 3.48 million tonnes, an increase of 16% QoQ and 13% YoY.
The Company calibrated its export volumes to 12% of the total sales at 0.47 million tonnes, in order to service the Indian market. The Company reduced inventories by 0.47 lac tonnes during the quarter and 4.73 lac tonnes during the nine months ended 31st December 2020.
The Company achieved highest ever quarterly domestic volume of sales of Flat products, propelled by strong demand of coated products. The proportion of higher margin Value-added & Special steel sales increased from 51% in 2Q FY2021 to 57% for 3Q FY2021.
The Crude Steel production and standalone saleable steel sales volumes for Nine Months of FY2021 stood at 10.89 million tonnes and 10.82 million tonnes respectively. The Company is on course to meet the annual guidance of 15 million tonnes of saleable steel sales, however it is expected that crude steel production guidance achievement will be ~95% mainly due to constraints on Iron ore availability in the country.