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India's Jindal Steel and Power reported a 15% drop in first-quarter profit on Friday, hurt by the rise in expenses and fall in steel prices.
The New Delhi-based company's consolidated profit after tax fell to 16.92 billion rupees ($204.31 million) in the three months ended June 30 from 19.90 billion rupees a year earlier.
While domestic demand has been rising for Indian metals companies, subdued demand from top consumer China remained a drag on prices, analysts said.
Jindal Steel, which has an annual crude steel production capacity of 9.6 million metric tons per annum, said overall sales grew 6% year-on-year. The share of exports stood at 10%.
India's steel industry, grappling with a slump in prices, was further hit when an export tax on certain steel intermediaries in May last year. The tax was withdrawn later in November.
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However, the export duty resulted in a 55% fall in India's steel exports in fiscal 2023, the company said.
Gross revenue dropped 1.5% to 145.39 billion rupees, down for the fourth straight quarter, while total expenses rose nearly 3%.
As part of plans to reduce reliance on third-party suppliers, Jindal Steel said it has secured three new non-coking coal mines in FY 2022-23, which will likely commence operations in FY 2023-24.
It further said domestic demand for steel is expected to witness an annual expansion of 8-9 MT in the next two financial years.
Bigger rivals, JSW Steel's first-quarter profit nearly tripled on higher sales, while Tata Steel posted a 92% slump in profit, hurt by the lower prices of alloy and expenses related to a pension scheme in Britain.
Shares of Jindal Steel closed 3.23% higher at 698.20 rupees ahead of the results.
($1 = 82.8170 Indian rupees)
(Reporting by Ashish Chandra in Bengaluru; Editing by Sohini Goswami)
