13 Jul 2022
The bottomline of the Jindal Steel & Power Ltd in the quarter ended June is seen growing exponentially in the June quarter due to an extremely low base caused by high tax expenses and one-time loss in the year ago period.
The topline on-the-year growth is seen up on the back of higher realisations and a lower base effect.
Estimates by three brokerage firms peg Jindal Steel’s consolidated net profit between 7 bln rupees and 13.9 bln rupees in Apr-Jun with the upper end of the range being lower than the previous quarter’s net profit of 15.1 bln rupees.
In the year-ago period, the company’s consolidated net profit had plummeted to 413 mln rupees on account of a one-time loss of 12.4 bln rupees and tax expenses of 1.3 bln rupees from the divestment of its stake in subsidiary Jindal Power.
The consolidated net sales of Jindal Steel in the June quarter is estimated to be in the 99-141 bln rupee range, as compared to actual net sales of 106.1 bln rupees in the year ago period and 143.4 bln rupees in the previous quarter.
Jindal Steel will declare its results for the Apr-Jun quarter on Friday.
The steel sector experienced mixed fortunes in the June quarter with higher steel prices aiding the topline, and operating profit getting hit by higher international coking coal costs but getting benefitted by lower domestic iron ore prices.
Jindal Steel’s earnings before interest, tax, depreciation and amortisation is seen falling 48% on the year due to higher raw material costs by brokerage IDBI Capital Market Services.
Kotak Institutional Equities sees the company’s EBITDA per tn to fall 55% on the year, and 14% on the quarter, to 12,771 rupees in the June quarter, due to adverse impact of higher coking coal costs which would be partially mitigated by increase in realisations by 6% on the year and 2% on the quarter.
The market will watch for volume guidance for 2022-23 (Apr-Mar) by the company FY23E and seek an update on its debt reduction program.
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