JSW Steel Q2FY23 dips to net loss of Rs848 crore on doubling of raw material costs and inventory losses

22 Oct 2022 , 08:08 PM

JSW Steel Ltd reported 30.93% growth in total sales revenues for the September 2022 quarter on consolidated basis at Rs41,778cr. Revenue growth was 11.41% in sequential terms.

For the quarter, the crude steel production stood at 5.66 million tonnes while the saleable steel stood at 5.74 million tonnes. The company was hit hard by the slowing global demand in the light of rising inflation and the ongoing war in the Caucuses.

The recession fears combined with the duties imposed on saleable grade steel by the government to discourage exports have been a drag on the company performance.

The net debt to equity and the net debt to EBITDA ratio stood at 1.04 times and 2.70 times respectively.

Consolidated net loss for September 2022 quarter was up Rs848cr on the back of a sharp doubling of raw material costs on a yoy basis to above Rs23,500 crore. Inventory losses also added to the problems.

The operating EBITDA stood at Rs1,751 with EBITDA margins of 4.19%, sharply lower than the previous quarters on a sharp spike in raw material and inventory costs.

PAT margins were negative at -2.03% in the Sep-22 quarter compared to 22.47% in the Sep-21 quarter and compared to 2.33% in June 2022 quarter. However, despite weak exports, domestic steel demand grew at 13% yoy on auto and infra demand.

Financial highlights for Sep-22 compared yoy and sequentially

	JSW Steel
Rs in Crore	Sep-22	Sep-21	YOY	Jun-22	QOQ
Total Income (Rs cr)	₹ 41,778	₹ 31,909	30.93%	₹ 37,500	11.41%
Operating Profit (Rs cr)	₹ 1,751	₹ 10,227	-82.88%	₹ 4,241	-58.73%
Net Profit (Rs cr)	₹ -848	₹ 7,170	-111.83%	₹ 838	-201.19%
Diluted EPS (Rs)	₹ -3.53	₹ 29.67		₹ 3.46
OPM	4.19%	32.05%		11.31%
Net Margins	-2.03%	22.47%		2.23%