JSW Steel Q2 results: Profit rises fourfold to ₹1,623 crore on strong sales

The company kickstarts quarterly results for the industry, which has seen steel prices drop despite the Indian government's import tariff on some steel products

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India's top steelmaker JSW Steel said it expects improved steel prices in the third quarter after reporting a nearly fourfold rise in second-quarter profit on Friday, driven by higher sales volumes despite lower prices.

  The Mumbai-based company kickstarts quarterly results for the industry, which has seen steel prices drop despite the Indian government's import tariff on some steel products.

  However, "steel prices are expected to increase in November-December," Jayant Acharya, chief executive of JSW Steel, said.

Earlier in the day, the company reported a consolidated net profit of ₹1,623 crore ($184.43 million) for the quarter ended September 30, against ₹439 crore profit a year ago.

  The company, led by billionaire Sajjan Jindal, posted a 20% rise in sales in the quarter, with capacity utilisation in its key market, India, at 92%. This, along with high manufacturing activity in the country, boosted demand.

  India's steel demand is expected to grow by 8%-9% this financial year, on the back of government spending and steady consumption, Acharya said.

  He added the company expects prices for its key raw material, coking coal, to increase by $3-$5 per tonne in the quarter ending December 31, while iron prices are expected to decline.

  The company's total expenses in the quarter rose 11.3%, as the cost of materials consumed increased by about 9% from a year ago.

  Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expanded to 17.4% from 14.2% in the year-ago period, but was lower than 18.2% in the previous quarter.

  Acharya also said the company's planned capex from the second half of the current financial year to over the next three years is about ₹69,000 crore. 

JSW Steel had earmarked ₹20,000 crore for capex this financial year, as reported in a July exchange filing.