Jindal Steel & Power slips after weak Q2 earnings

capital market | Mumbai |

Jindal Steel & Power fell 0.91% to Rs 168.60 at 9:41 IST on BSE after consolidated net profit fell 2.26% to Rs 441.83 crore on 7.15% rise in total income to Rs 5183.18 crore in Q2 September 2014 over Q2 September 2013.

The result was announced on Tuesday, 4 November 2014, when the market was shut for a public holiday.

Meanwhile, the BSE Sensex was up 113.26 points, or 0.41%, to 27,973.64.

On BSE, so far 3.12 lakh shares were traded in the counter, compared with an average volume of 8.56 lakh shares in the past one quarter.

The stock hit a high of Rs 173 and a low of Rs 166.60 so far during the day. The stock hit a 52-week high of Rs 350 on 9 June 2014. The stock hit a 52-week low of Rs 128 on 20 October 2014.

The stock had underperformed the market over the past one month till 3 November 2014, falling 0.47% compared with 4.86% rise in the Sensex. The scrip had also underperformed the market in past one quarter, falling 36.42% as against Sensex's 9.34% rise.

The mid-cap company has an equity capital of Rs 91.49 crore. Face value per share is Re 1.

Jindal Steel & Power (JSPL), notwithstanding several unfavourable developments during Q2 September 2014, including de-allocation of its coal mines, reduced demand for steel due to monsoon season and major difficulties encountered in importing raw material due to heavy congestion in ports and non - availability of rail transport out of ports. Earnings before interest, taxes, depreciation and amortization (EBITDA) in percentage terms increased from 30% in Q2 September 2013 to 32% in Q2 September 2014. However, due to 53% increase in burden of interest and depreciation, the PAT for Q2 September 2014 was lower by 12%. The company's cash profit during Q2 increased from Rs 907 crore in Q2 September 2013 to Rs 1308 crore in Q2 September 2014 - a net increase of 44%, the company said in a statement.

Jindal Power, inspite of major problems in meeting its coal requirement for Tamnar Phase II units saw its sales and EBITDA grow by 39% and 21% respectively in Q2 September 2014 over Q2 September 2013. Three out of its four units are already commissioned, while the fourth unit would be commissioned before the end of the current financial year. Two of the four 600 MW each units already have the coal linkage while the remaining two, as per Government's commitment will be given fuel linkage before 31 March 2015. As per Supreme Court's recent judgement, the coal block of Tamnar Phase - I is cancelled but the company is making all possible efforts to secure the necessary coal blocks / linkage from the auction to be held shortly, the company said.

JSPL's Oman unit has been performing consistently well and during Q2 September 2014 its turnover and PAT increased by 32% and 104% respectively. However, the company's WCL Australia coking coal mines continued to make losses due to operational reasons as well as low price levels. However, a major restructuring of its operations has been done which is expected to result in turnaround of business next year, the company added.

Jindal Steel & Power is one of India's major steel producers with a significant presence in sectors like mining, power generation and infrastructure.

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