Jindal Stainless Ltd Q2FY22 result: Net profit soars 5 times to Rs 412 cr

During the June quarter of FY22, the company reported a net profit of Rs 306 crore.

“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,” said the company’s managing Director, Abhyuday Jindal.

The company's sales volume surged by 8 percent from 2,37,852 MT in Q1FY22 to 2,56,664 in Q2FY22 while it recorded a sale of 2,30,350 MT in Q2FY21, an increase of 11 percent.

On a consolidated level, EBITDA (operating earnings) was INR 748 crore, up 117 per cent year-on-year (yoy) and up 35 per cent on a quarter-on-quarter (QoQ) basis.

The net revenue of the Company was INR 5,027 crore.

"In its journey towards IR 4.0, JSL implemented a SAP-enabled digital transport management system. This is expected to bring about significant efficiency improvement in the overall supply chain through real-time exchange of information across the entire gamut of stakeholders and consequent reduction in turn-around time," the company said.

However, the upward rally in prices of input materials continued unabated throughout the second quarter.  

The average LME prices of Nickel and Ferro-chrome in Q2FY22 climbed by 10 percent and 21 percent respectively over Q1FY22, which had a positive impact on inventory valuation.

This, along with an improved volume mix, led to a 23 percent increase in EBITDA in Q2FY22 over the sequential quarter.

On a standalone basis, JSL’s EBITDA and profit after tax (PAT) stood at Rs 711 crore and Rs 363 crore, respectively.

 In an adverse development, the government extended the suspension period of Countervailing Duty (CVD) from China by another five months beyond September 30, 2021, the company said.

The final findings issued by Directorate General of Trade Remedies, Ministry of Commerce and Industry on import of stainless steel flat products from Indonesia have yet not been notified by the Department of Revenue, Ministry of Finance.

"These decisions have dealt a blow to the domestic industry, which has witnessed an import surge of 115% during the April’21- September’21 period on a YoY basis. The share of imports in the domestic market in Q2FY22 stood at 40 percent, compared to 35 percent in Q1FY22. The rising imports trend hurts medium and long-term prospects of the Indian stainless steel industry and will severely hurt MSME manufacturers," a statement by the company read.

The domestic industry is in constant dialogue with the government on this issue.

The Company said that a petition for merger with JSHL is pending before Hon’ble NCLT, Chandigarh for approval.

Jindal Stainless Ltd has a capacity of 1.9 MT with 1.1 in its Jajpur facility and 0.8 in Hisar facility. The company is planning to double its capacity with a total Capex of Rs 2,600 crore by March of FY 23. It plans to invest Rs 2,150 crore for Jajpur and Rs 450 crore for Hisar.

“All brownfield expansion projects announced in Q1FY22 are on track,” the company said.

Q2FY22 Highlights

Standalone performance:

·         Sales volume registered at 256,664 tonnes, up by 8% over Q1FY22

·         Revenue at INR 4,815 crore, up by 25% over Q1FY22

·         EBITDA at INR 711 crore, up by 23% over Q1FY22

·         PAT recorded at INR 363 crore vs INR 271 crore in Q1FY22, up by 34% 

·         Net lenders debt stood at INR 1,564 crore

·         Interest cost reduced by 37% YoY

Consolidated performance:

·         Revenue stood at INR 5,027 crore, up by 25% over Q1FY22

·         EBITDA at INR 748 crore; up by 24% over Q1FY22

·         PAT at INR 412 crore; up by 35% over Q1FY22