Hit by rising costs and interest outgo, Jindal Steel and Power today reported a 35 per cent decline in its consolidated net profit to Rs 561.57 crore for the quarter ended December 31, 2013.
The company expects an upsurge in Indian economy after a new government takes charge at the Centre post general elections as present macro-economic conditions are "somewhat uncertain", Jindal Steel and Power's (JSPL) Managing Director and CEO Ravi Uppal told reporters here.
"We do feel that after elections once the new government comes in there will be an upsurge in the economy. Even the World Bank and IMF have predicted that.... As you know, this year industrial growth is less than 1 per cent, so we do see that things will take off (after the new government takes charge)," he said.
The company had reported a net profit of Rs 867.27 crore in the corresponding period of the previous fiscal.
On decline of profits, he said that "the most significant factor has been interest cost, depreciation cost on the new plant and upgradation plans that we have done.... We have reduced net sales realisation per tonne basis compared to last year and input cost has also gone up."
JSPL's net sales in the quarter under review was up 14 per cent to Rs 5,335.79 crore vis-a-vis Rs 4,683.31 crore in the same period last fiscal.
However, its total expenditure accounted for 77.52 per cent of net sales at Rs 4,136.57 crore as depreciation cost rose by 21 per cent 460 crore.
Company's interest outgo also went up by over 56 per cent to Rs 429.65 crore.
Uppal also said that he is cautiously optimistic on revival of growth and steel demand in the present quarter due to the political uncertainty.
"We do hope for more buoyancy in this quarter but at this moment, the political environment is some what uncertain. It remains to be seen how much of this hope and optimism can be realised," he said, adding that normally companies book 30 per cent of their orders in the fourth (or current) quarter.
When asked about showcause notice sent by the Coal Ministry to JSPL for not meeting the required timeline for development of its 3 mines --Utkal B1, Jitpur and Gare Palma IV/-- Uppal said: "We are working on it. Most of the clearances have been obtained and last few are left."
Early this month, the Coal Ministry had issued showcause notices to allocatees of 61 coal blocks and had given time till February 12 to respond. Thereafter, the government will begin the process of deallocation of the blocks.
Of the 3 blocks, mining lease for Utkal B1 remains to be signed and the issue is stuck somewhere between the Odisha government and the Centre, he said. For Jitpur block, JSPL has secured the first stage forest and environment clearances and is in the process of securing remaining approvals.
