New Delhi : Jindal Stainless, India’s leading stainless Steel maker has reported 21% drop in net profit at 54 crore in the first half of the current fiscal, despite achieving a revenue growth of 35% at Rs,6228 Crore. The revenue of the company continued to grow both on a quarterly basis by 18% at Rs. 3081 over the corresponding period last year (CPLY) respectively. The company built up inventory in Q1 to support a planned maintenance shutdown in Q2. This, along with steep hike in nickel prices during Q1, impacted sales of finished inventory in Q2, thereby causing inventory losses.
On a sequential basis, the company registered a marginal dip (-2%) in revenue, from Rs 3,147 crore in Q1FY19 to Rs 3,081 crore in Q2FY19. Exceptional loss of Rs 53 crore, primarily on account on mark-to-market forex loss, resulted in a net loss of Rs 36 crore in Q2FY19. Production volume dipped from 0.26 MT to 0.2 MT as a result of planned maintenance shutdown.
These factors slowed down the overall EBIDTA for Q2FY19. The production volumes for Q2 and H1 FY19 stood at 0.2 MT and 0.46 MT, registering a respective increase of 2% and 22% over CPLY. This was in tune with the company’s target to increase its annual capacity from the present level of 0.8 MT to 1.1 MT by the end of FY19.
Commenting on the performance of the quarter, Managing Director, JSL, Abhyuday Jindal, said, “Our Q2 results are a reflection of the cyclical nature of core sector, including its determinants such as input prices and forex volatility. Our focus is to increase annual production by 15% in the next two years to cater to the growing needs of domestic markets. Our product mix is well distributed among different segments, and all of them are showing a healthy growth rate. Besides, we are increasingly moving towards more value added products in railways, automobiles, and other sectors. We are also increasing our presence in the ferretic segment, which will balance the impact of raw material price volatility. This portfolio enhancement, clubbed with gradually growing demand, will help in improved operating performance going forward.” Having become eligible to exit from Corporate Debt Restructuring Scheme (CDR), JSL expects to be out of CDR by end of FY19.