Jindal Steel & Power profit drops 27% to Rs 1,866 cr in December quarter

Jindal Steel & Power on Tuesday reported a 27.2 per cent drop in consolidated profit at Rs 1,866.08 for the quarter ended December 2021 owing to higher expenses.

The company had posted a consolidated profit of Rs 2,566.68 crore in the corresponding period of the previous fiscal, Jindal Steel & Power said in a BSE filing.

However, the consolidated income of the company during the October-December period increased to Rs 12,535.35 crore, over Rs 9,643.88 crore in the year-ago period.

In a statement, the company said that its "consolidated PAT of Rs 1,622 crore fell by 34 per cent Y-o-Y due to lower operating profit and higher tax expense."

While the third quarter of FY'22 witnessed a sharp improvement in domestic demand on a sequential basis, the quarter continued to be marred by unseasonal rains, lack of railway rakes and muted demand amidst rising COVID-19 cases.

Steel demand in India registered a seven per cent Y-o-Y fall in the third quarter of ongoing fiscal.

The company sold more domestically this quarter, reflecting the industry trend. government's infrastructure push in the recent budget, increased rake availability and rising private capex should further boost domestic steel demand. This bodes well for the company with two-thirds of its product portfolio catering largely to country's construction and infrastructure sector.

On the outlook, the company said that the domestic steel industry, however, continues to grapple with the sharp rise in the coking coal prices.

"Premium hard coking coal has risen more than 3x so far in FY22. Rising seaborne iron ore price has also triggered increase in domestic iron ore prices in the recent weeks," it said.

However, supply of coking coal from captive mines in Mozambique and Australia coupled with iron ore from Kasia and Tensa mine should provide the company some relief from rising cost headwinds and ensure continued availability.