Jindal Stainless jumped 14.93% to Rs 190.45 after the company reported 34% rise in standalone net profit to Rs 363 crore on a 25% increase in total revenue to Rs 4,815 crore in Q2 FY22 as compared with Q1 FY22.
The company said that an overall healthy demand environment post the second wave of COVID in Q1 FY22 pulled up sales volume by 8% over Q1 FY22, to 256,664 tonnes in Q2 FY22. The upward rally in prices of input materials continued unabated throughout the second quarter.
The average LME prices of nickel and ferro-chrome in Q2 FY22 climbed by 10% and 21% respectively over Q1 FY22, which had a positive impact on inventory valuation. This, along with an improved volume mix, led to a 23% increase in EBITDA in Q2 FY22 over the sequential quarter. The company's EBITDA was Rs 711 crore in the second quarter.
All major end-use segments like process industry, pipe & tube, railways & wagons, and metro rail grew during the quarter keeping the stainless-steel demand firm. As general manufacturing picked-up pace during the quarter, demand for special grades like duplex and super austenitic, where JSL is an established supplier, also gained momentum.
Auto segment sales remained weak on account of the long waiting period necessitated by semiconductor shortage. Despite prevailing logistical challenges due to container scarcity, JSL maintained strong operational performance through advance planning and strategic sourcing of raw materials.
While maintaining major focus on the domestic markets, the business strategy helped the company increase its exports percentage from 20% in Q1 FY22 to 23% during Q2 FY22 to counter the continual surge in imports of stainless steel from China and Chinese-funded investments in Indonesia. The domestic share of sales volumes, however, declined to 77% in Q2 FY22 from 80% in Q1 FY22.
As compared to Q2 FY21, the company's net profit and sales in Q2 FY22 have increased by 269% and 53%, respectively.
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Abhyuday Jindal, managing director, JSL, said: Economic recovery has led to improved sentiment in the overall business outlook. Once again, JSL has delivered robust performance which underlines our solid business fundamentals. Despite facing uncertainty and unprecedented challenges in logistics, we've been able to service our customers in India and abroad. At a time when the market is swamped with imports from China and Indonesia, the industry is looking forward to the government's timely action to encourage domestic manufacturing.
Jindal Stainless (JSL) is the largest manufacturer of stainless steel in India.
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