HomeBUSINESSJSW Steel Q1 results: PAT declines 86% to ₹838 cr, revenue up...

JSW Steel Q1 results: PAT declines 86% to ₹838 cr, revenue up 32%

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India’s largest steel producer, JSW Steel Ltd, on Friday reported a 85.8% decline in its consolidated net profit to 838 crore for the April-June quarter (Q1FY23). The company had clocked 5,904 crore net profit in the year-ago quarter (Q1FY22). 

The firm had posted a net profit of 3,234 crore in the March 2022 quarter. In Q1FY23, the company’s India steel consumption was at 27.36 million tonnes, down by 5.6% sequentially. While exports dropped by 26% to 2.88 million tonnes, due to weaker global demand and imposition of export duty.

The Indian steel industry’s revenue from operations rose 32% to 38,086 crore for the quarter under review as against 28,902 crore in the corresponding quarter of last fiscal. Revenue stood at 46,895 crore in Q4FY22.

During the June quarter, the firm’s crude steel production came at 5.77 million tonnes. Saleable steel sales stood at 4.49 million tonnes, lower by 25% sequentially, impacted by a sharp reduction in exports due to the levy of export duty and a fall in apparent consumption due to destocking at the user level.

In its audit report, JSW Steel said that during the first quarter of this fiscal, high inflation across major economies on the back of supply chain disruptions and the ongoing Russia-Ukraine war has impacted the global economic outlook. 

While India has been relatively resilient with economic activity recovering from the Covid-induced slump, high inflation and policy rate tightening worldwide have become formidable headwinds.

“The domestic steel industry was impacted by falling global prices and the imposition of a 15% duty on certain steel exports in May 2022 further exacerbated the situation with a steep fall in exports, of 26% qoq. The export duty on steel products is expected to be a temporary measure to contain inflation and may be removed once inflation cools down. Inherent demand from auto and construction and infrastructure segments remain strong that should support overall steel consumption during FY23,” JSW Steel said in a statement.

Due to volatile markets condition, JSW Steel preponed certain shutdowns that were scheduled during the year, which lowered the average capacity utilisation (excluding Dolvi Phase-II) for Q1FY23 to 93% from 98% in the preceding quarter.

The 5mtpa Dolvi Phase-II expansion continued to ramp up and will drive volume growth as demand recovers in the coming quarters, the company stated.

JSW Steel is the flagship business of the diversified $22 billion JSW Group which has presence in energy, infrastructure, cement, paints, sports, and venture capital besides steel.

JSW Steel shares closed at 582.95 apiece, down by 4.60 or 0.78% on the NSE. Its market cap is around 1,40,766.83 crore.

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