JSW Steel Q1 PAT tumbles 86% YoY to Rs 838 cr

22 Jul 2022 , 04:44 PM

Revenue from operations surged 31.78% to Rs 38,086 crore in Q1 FY23 compared with Rs 28,902 crore in the same quarter last year. Profit before tax in Q1 FY23 stood at Rs 1,281 crore, down by 85.14% from Rs 8,619 crore reported in Q1 FY22. The company registered operating EBITDA of Rs 4,309 crore, with an EBITDA margin of 11.31%. The fall in EBITDA was attributable to lower volume of sales, one-off items such as FX loan translation losses, NRV provisions, etc. Crude Steel Production was at 5.77 million tones in Q1 FY23. Saleable Steel sales for the quarter stood at 4.49 million tonnes, lower by 25% QoQ, impacted by sharp reduction in exports due to levy of export duty and fall in apparent consumption due to destocking at the user level. During the first quarter of FY23, high inflation across major economics on the back of supply chain disruptions and the Russia-Ukraine conflict has impacted the global economic outlook. While India has been relatively resilient with economic activity recovering from the Covid induced slump, high inflation and policy rate tightening across the world have become formidable headwinds. The domestic steel industry was impacted by falling global prices and the imposition of a 15% duty on certain steel exports in May 2022 further exacerbated the situation with a steep fall in exports, of 26% QoQ. The export duty on steel products is expected to be a temporary measure to contain inflation and may be removed once inflation cools down. Inherent demand from auto and construction & infrastructure segments remains strong that should support overall steel consumption during FY23. Indias steel consumption during Q1 FY23 was 27.36 million tonnes, down 5.6% QoQ, while exports fell 26% to 2.88 million tonnes due to the weaker global demand and imposition of export duty. The companys consolidated net gearing (net debt to equity) stood at 0.98x at the end of the quarter as against 0.83x at the end of Q4 FY22, and net debt to EBITDA stood at 2.03x as against 1.45x at the end of Q4 FY22. A significant portion of increase in debt was mainly due to locking up of working capital in inventory. The companys capex spend was Rs 3,702 crore during Q1 FY23, against the planned capex spend of Rs 20,000 crores for FY23. Considering the current market conditions, the company expects to calibrate its capex spend to Rs 15,000 crores for FY23. JSW Steel, the flagship business of the diversified, $22 billion JSW Group. JSW Steel is Indias leading integrated steel company with a steel-making capacity of 28.5 MTPA in India & USA, including capacities under joint control. Shares of JSW Steel were down 0.99% to settle at Rs 582.35 on the BSE. Powered by Capital Market – Live News