Jindal Steel & Power (JSPL) soared 7.37% to Rs 103.50 after consolidated net profit stood at Rs 305.62 crore in Q4 March 2020 compared with net loss of Rs 2,713.34 crore in Q4 March 2019.
Consolidated net sales dropped 13.27% to Rs 8,810.68 crore in Q4 March 2020 over Q4 March 2019. The company reported a pre-tax profit of Rs 370.35 crore in Q4 March 2020 compared with a pre-tax loss of Rs 3,425.52 crore in Q4 March 2019. Current tax expense stood at Rs 764.32 crore in Q4 March 2020 as against Rs 50.63 crore in Q4 March 2019. The Q4 earnings were announced on Monday, 25 May 2020.
EBITDA jumped 20% to Rs 2,220 crore in Q4 March 2020 from Rs 1,845 crore in Q4 March 2019. EBITDA margin improved to 25% in Q4 FY20 as against 18% in Q4 FY19.
On a consolidated basis, JSPL steel production grew 5% to 2.11 million tonnes (MT) in Q4 March 2020 from 2.01 million tonnes (MT) in Q4 March 2019. Steel sales slipped 2% to 1.93 MT in Q4 March 2020 as compared to 1.98 MT in Q4 March 2019.
Net Debt to EBITDA (trailing) at the end of FY20 stood at 4.57x as compared to 4.66x in March 2019. As of 31 March 2020, JSPL reported a consolidated net debt of Rs 35,919 crore. On a constant currency basis, based on 31 March 2019 exchange rates, the net debt reported would be Rs 34,758 crore as against Rs 39,137 crore as on 31 March 2019. Jindal Power continued to generate cash profit Rs 265 crore during the quarter.
With regards to COVID-19 pandemic, JSPL has been nimble and agile in these uncertain times, changing its business model to market & sell its steel products in overseas markets more than domestic markets. The company focused its efforts towards securing full export order book to ensure continuous operation of its plant, even during the lockdown periods announced by the Government of India.
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In its outlook, JSPL said that while some demand destruction is estimated due to stoppage/delayed restart of construction sites (on the back of less availability of migrant work force), fall in overall demand for automobiles, white goods etc. and further decline in private expenditure (which was already lacking over the past year), this might be partially offset by the elevated levels of export for the domestic steel players and certain curtailments/shutdowns on the supply side. With the lockdown now opening up in a phased manner and government spending expected to rise, domestic demand for long products can be expected to come back faster than flat products.
In power segment, the electricity demand has declined by about 25%. Given that the Company's power business were set up at one of the lowest capital costs and have the advantage of lower coal costs being pit head plants, Jindal Power is all set to benefit from the recent government initiatives. With about 50 mines set to be auctioned in the next few weeks, the company can look to win coal mines to secure raw material supply for the entire JPL power capacity. Also, with the recent package of the Government of India for Discoms, JPL would look to substantially realize its pending receivables from TANGEDCO.
JSPL's segments majorly include iron & steel and power. It is also engaged in aviation services and machinery division. The company's product portfolio consists of steel product mix, construction solutions, and construction material and solutions.
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