JSW Steel, India’s second largest private steel manufacturer, swung back to profit in the July-September quarter as domestic demand recovered and the pandemic-induced lockdown curbs were eased across the country.
The company reported a net profit of Rs 1,595 crore for Q2, down 37 per cent year-on-year but far better than the June quarter performance when it had reported a net loss of Rs 582 crore. It said capacity utilisation returned to pre-covid levels at 86 per cent in the second quarter, from 66 per cent in April-June and that as domestic demand recovered, the company’s exports eased to 28 per cent from 57 per cent in Q1FY21.
Between July and September, crude steel production rose 30 per cent sequentially to 3.85 million tonnes. Production of flat steel rose 21 per cent year-on-year to 3.12 million tonnes during July-September while that of long steel fell 9 per cent to 0.77 million tonnes.
With crude steel production and saleable steel volumes for first half of FY2021 at 6.81 million tonnes and 6.92 million tonnes respectively, JSW said it is on course to meet its annual guidance of 15 million tonnes of saleable steel.
JSW’s revenue from operations stood at Rs 19,264 crore, while operating earnings before interest, tax, depreciation and amortisation (EBITDA) was Rs 4,414 crore. Its overseas subsidiaries however, continue to be a drag on the company’s profitability. “In India, a broad-based economic recovery is underway with business sentiments improving substantially over the recent months,” the company said in a press release. “The manufacturing activities reflect strong rebound, and the service sector is gradually stabilizing. The recovery in automotive sector, notably in two wheelers and passenger vehicles, is better than anticipated. The rural economy is resilient, aided by good monsoon, stimulus measures focused on increasing rural income and consumption. Further structural reforms like farm bill augur well for the rural sector.”