JSPL hits 4-year low on weak Q4 earnings

Q4 consolidated net profit down 35% yoy at Rs 753 crore due to higher interest burden and lower sales realizations.

Jindal Steel and Power (JSPL) is trading lower by 3% at Rs 319 after reporting 35% year-on-year (yoy) fall in its consolidated net profit at Rs 753 crore for the quarter ended March 2013 (Q4) due to higher interest burden and lower sales realizations. Analysts on average had expected the company to report a net profit of Rs 950 crore.

Net sales during the reported quarter grew marginally by 2% at Rs 5,583 crore on account of soft commodity prices. Moreover, the company's interest burden during Q4 rose by almost two-fold to Rs 239 crore from Rs 129 crore over the previous year.

“EBIT (earnings before interest and tax) for the steel division was down 23% qoq even on higher volumes, reflecting sharp drop in realizations. We are also concerned with a 4.3% qoq drop in power production volumes in the standalone business, suggesting that the 1,350MW project could be facing further issues stabilization issues,” says Chirag Shah analyst at Barclays in latest note.

The stock opened at Rs 324 and hit a low of Rs 318, its lowest price since May 2009 on NSE. A combined 4.35 million shares have changed hands on the counter so far on NSE and BSE.