Jindal Steel Q1 results: PAT falls 21% to Rs 1,338 cr on weak steel demand

In April-June, general elections, which lasted for nearly half quarter, led to muted steel demand, analysts said, which was compounded by higher costs of rebar, a key raw material for steelmakers

Jindal Steel and Power reported a drop in first-quarter profit on Wednesday as a string of higher expenses added to the dent caused by weak steel demand in a quarter that included the general elections.
 

The steelmaker's consolidated profit after tax fell 21 per cent to Rs 1,338 cr (around $160 mn) in the April-June quarter. Raw material costs surged 22 per cent, leading to a 8 per cent rise in expenses at Rs 11,793 cr, the company said.
 

KEY CONTEXT
 

Jindal Steel's coal mines have helped it offset rising iron ore costs for the past few quarters, while its results also got a lift from buoyant steel demand due to the government's sustained spending on manufacturing and infrastructure ahead of the general elections.
 

In April-June however, the general elections, which lasted for nearly half the quarter, led to muted steel demand, analysts said, which was compounded by higher costs of rebar, a key raw material for steelmakers.

Last week, bigger peer JSW Steel reported a bigger-than-expected fall in profit.

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