Shares of steel companies were trading actively on Thursday, and gained up to 5 per cent on the BSE after Jindal Steel & Power Limited (JSPL) recorded the highest ever quarterly domestic production and sales in the quarter-ended December 2019 (Q3FY20).
Steel Authority of India (SAIL), JSPL, JSW Steel and Tata Steel from the metal index were up in the range of 2 to 5 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.33 per cent, while the sector index S&P BSE Metal added 1.2 per cent at 09:44 am.
Individually, JSPL surged 4 per cent to Rs 172, its highest level since May 7, 2019 on the BSE. In the past three months, the stock has rallied 79 per cent, as compared to a 9 per cent rise in the benchmark index.
“The company has recorded the highest ever quarterly domestic production of crude steel and related products with a 22 per cent year on year (Y-o-Y) growth in the third quarter ended December 2019, as a result of the strong and consistence performance across all locations, especially in the Angul operations. The total crude steel and related production stood at 1.61 million tonnes, compared to 1.32 million tonnes in the corresponding period last year,” JSPL said in a press release.
During Q3FY20, JSPL recorded a growth of 30 per cent in sales at 1.66 million tonnes, as against 1.27 million tonnes in the same period last year. Export shipments increased to more than 3 lakh MT, an increase of 213 per cent (YoY) during Q3FY20.
The management said the company is going to start DRI- CGP (Coal Gasification plant) unit at Angul during January 2020, and together with a favourably evolving product mix, it expects to further drive growth in sales and profit.
SAIL too said it has achieved the highest ever sales in a month during December 2019. With sales of 1.68 million tonnes in December 2019, the company clocked a growth of 47 per cent over the previous year.
Recently, Union finance minister Nirmala Sitharaman unveiled a Rs 102-trillion National Infrastructure Pipeline (NIP) project, to be implemented over the next five years, as part of the government’s push towards making India a $5 trillion economy by 2024-25.
The increased demand from infrastructure projects, especially for segments like railways, defense, petroleum, and pipelines, is expected to drive steel demand.