Jindal Saw Q2 Net up 35%; stops work at Bhilwara steel plant

Steel pipe maker Jindal Saw today reported 35 per cent growth in standalone net profit at Rs 101 crore for the quarter ended September 30, 2015.
The firm, part of the USD 18 billion OP Jindal Group, had clocked a net profit of Rs 75 crore in the year-ago period, it said in a BSE filing.
Total standalone income, however, fell by 15.5 per cent to Rs 1,345 crore in the July-September quarter this fiscal from Rs 1,591 crore during the same quarter in 2014-15.
Its total expenses were lower at Rs 1,216 crore from Rs 1,445 crore during the quarter under review.

In terms of production and sales, September quarter has performed "marginally softer" compared to April-June quarter and the September quarter in 2014-15, it said.
During the quarter ended September 30, 2015, the company produced pipes & pig iron of around 220,000 tonnes against 230,000 tonnes in the year-ago period. Pellet production stood at around 263,000 tonnes as compared to 309,000 tonnes.

India accounted for 89 per cent of total sales of Jindal Saw with remaining 11 per cent coming from overseas markets.
The current order book for pipes and pellets of the firm stood at around USD 800 million, with Large Diameter Pipes accounting for a lions share followed by Ductile Iron Pipes, Seamless Pipes & others and Pellets.

Current order book includes export of about 35 per cent. The major exports orders are from Middle East, Gulf region and South East Asia and Far East, it added.
On projects and capital expenditure, Jindal Saw said it has has "deferred its decision to implement Steel Plant at Bhilwara (Rajasthan) for the time being."
It did not give any reasons for stopping work.
"Company has completed major projects including DI facility, Beneficiation and Pellet Plant at Bhilwara etc. As we have availability of hot metal in the DI segment, the emphasis is on the maximization of the DI pipe production for higher value addition," it, however added.

This required some debottlenecking and increase in the finishing and other facilities in DI segment, it said.
Jindal Saw's net debt (at standalone level) stood at about Rs 4,727.7 crore (around USD 718 million) including ECB/long term loans and fund based working capital and other unsecured loans for the quarter ended September 2015, it said.
This includes working capital loans of Rs 2,435.5 crore (about USD 370 million) remained at elevated level due to higher order book etc, it added.
On outlook, it said continued weakness in oil prices on account of oversupplied market conditions coupled with the geo political and war like situations in MENA region may impact on the new demand for the pipes in Oil & Gas.

The weakness in the coal and iron ore prices along-with projections for the further weakness may keep a check on the sale prices of our products and thus profitability including pellets, it added.