Seshagiri Rao MVS, Jt. Managing Director & Group CFO, JSW Steel, is a member of the Institute of Cost & Works Accountants of India and Licentiate member of the Institute of Company Secretaries of India. He is a Certified Associate of the Indian Institute of Chartered Financial Analysts of India. Rao’s journey in JSW began as the Chief Financial Officer and became Director (Finance) in the year 1999 and has over the years grown with the company shouldering higher responsibilities. Prior to joining JSW, he has worked with VST Industries, Andhra Bank, ESSAR Steel Ltd., and Nicholas Piramal India Limited in various capacities.
JSW Steel Limited, belonging to JSW Group, part of the OP Jindal Group, is one of the lowest cost steel producers in the world. The group has diversified interests in carbon steel, power, mining, industrial gases, port facilities, aluminium, cement and information technology. JSW is engaged in the manufacture of flat and long products viz. HR Coils, CR Coils, Galvanised products, auto grade / white goods grade CRCA Steel, Bars and Rods. Incorporated in 1994, it has grown to US $5 billion in fifteen years. The company has the largest galvanising and colour-coating production capacity in the Country and is the largest exporter of galvanised products, with a presence in over 100 countries across five continents.
Yash Ved of IIFL provides you the highlights of a conference call, where Seshagiri Rao says “JSW Steel is planning to raise prices by 1-2% from February 1.”
Brief us about your Financials?
JSW Steel Ltd has posted a net profit after Tax, Minority Interest & Share of Profit / (Losses) of Associates of Rs. 4664.90 mn for the quarter ended December 31, 2013 where as the same was at net loss of Rs. (737.00) mn for the quarter ended December 31, 2012.
Total Income is Rs. 136372.10 mn for the quarter ended December 31, 2013 where as the same was at Rs. 88961.20 mn for the quarter ended December 31, 2012.
How was your quarter as a whole?
We have shown stellar performance in all around growth in terms of volumes, operational improvement and also in terms of hedging policy
During the quarter, the Company achieved highest ever crude steel production (3.19 million tones, 52% growth YoY), highest ever consolidated Gross Turnover of Rs14,357 crores, highest ever consolidated Exports of 1.0 million tonne (accounting for ~60% of India’s overall steel exports) and highest ever consolidated EBIDTA of Rs2,409 crores.
Amidst a challenging operating environment marked by muted domestic demand growth, the Company has achieved 100% of its production and sales volume guidance for FY14 (on a pro-rated basis).
The company is likely to meet its production target of 12mt.
We expect 2014-15 to be better year than last year.
We are accelerating our Capex spend and investing in backward integration projects.
What is your outlook for the coming quarters?
Global economic recovery is likely to gather pace in CY14 - as reflected by improving fundamentals and upgrades to consensus growth forecasts for developed markets, while emerging economies continue to face moderation in expected growth rates. The US, Japan and Europe continue to witness accommodative financial conditions. Recent data points (IIP, PMI, etc) indicate that rising manufacturing confidence in each of these key regions is likely to provide a strong platform for growth in CY14.
Global crude steel production in CY13 increased by 3.5% to 1,607 million tonnes and apparent finished steel use is expected to have grown by 3.1% to 1,475 million tonnes. China has displayed a remarkable growth with production up by 7.5% to 779 million tonnes and projected apparent finished steel use up by 6% to 700 million tonnes in CY13. As per the World Steel Association (WSA), global apparent finished steel use in CY14 is likely to increase by 3.3% to 1,523 million tonnes with Chinese demand growing at 3% to 721 million tonnes.
India’s crude steel production during 9MFY14 grew by 4.8% to 60.8 million tonnes with apparent finished steel consumption up by 0.7% to 54.7 million tonnes. Apparent demand for flats (including pipes) reduced by 1.9% while longs demand grew by 2.8% over this period. With steel exports surging on the back of improving demand in developed markets and INR depreciation enhancing export competitiveness of Indian steel mills, India turned into a net steel exporter in 3QFY14.
India continues to witness a challenging macro-economic environment with weak industrial growth and drying up of the investment pipeline. However, of late, currency has stabilised, inflation has marginally receded, exports have improved, imports have reduced, foreign exchange reserves have increased – all of which is likely to reduce the CAD to around US$50 bn in FY14 from US$88bn in FY13.
Do you expec any price increase for the products?
JSW Steel is planning to raise prices by 1-2% from February 1.
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