JSW Steel Q3 net dip 26% to Rs 382 cr

Costlier raw material and rise in fuel costs have eaten out JSW Steel's third quarter profit as the Mumbai-based steel maker reported a 25.65 per cent dip in net to Rs 382.30 crore though sales touched a record.

The Sajjan Jindal-led firm, which clocked its highest-ever quarterly sales during the period at 1.593 million tonnes on enhanced production at its Vijaynagar facility, had reported Rs 514.23 crore net profit in the same quarter last fiscal, it said in a statement.

Though JSW's production was at 1.636 million tonnes, up by 11 per cent over the corresponding quarter; its expenses on raw material and fuel went up by more than 38 per cent to Rs 3,898.79 crore from Rs 2,818.82 crore a year ago.

The rise in expenditure is mainly because of dearer raw materials including coking coal and iron ore, the price of which reached to a new high during the quarter. Coal prices also escalated by more than 60 per cent during the quarter.

JSW Steel does not own any coking coal mining licences domestically and thus imports its entire requirement. It also has to bring around 80 per cent of the iron ore requirement to feed the steel plants from outside the country.

Net sales of the company, however, surged by 26 per cent to Rs 5,771.42 crore compared to Rs 4,587.66 crore during the October-December quarter of the current fiscal on enhanced production and better product-mix. JSW Steel had started the first phase of the hot strip mill at its Vijaynagar facility in April last year.

The company said that around 88 per cent out of its total sales came from within India and the rest was contributed by exports. JSW Steel had sold 84 per cent of total production domestically in the corresponding period of the last fiscal.

"This has been aided by higher sales through JSW Shoppe. The retail sales through Shoppe accounted for 26 per cent of domestic sales excluding semis," the statement said.