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Jindal Steel's profit rises 21% to ₹774 crore but margins shrink
Revenue jumped 43% in the September quarter, yet the steelmaker's operating margin fell 240 basis points, the opposite of what rival JSW Steel reported the same day.
Key points
- Jindal Steel's net profit rose 21% to ₹774 crore in the July-September quarter.
- Revenue grew 43% to ₹16,679 crore from ₹11,686 crore a year earlier.
- The operating margin narrowed to 15.4% from 17.8%.
Jindal Steel’s profit rose 21% in the July-September quarter on much higher sales, but the steelmaker kept less of each rupee it earned as its operating margin narrowed.
Net profit rose to ₹774 crore from ₹638 crore a year earlier, according to results released on Friday. Revenue grew 43% to ₹16,679 crore from ₹11,686 crore.
EBITDA, or operating profit, increased 24% to ₹2,573 crore from ₹2,081 crore. Because operating profit grew more slowly than sales, the EBITDA margin fell 240 basis points to 15.4% from 17.8%.
That set Jindal Steel apart from JSW Steel, which reported the same day and widened its margin by 280 basis points to 18.6% on record volumes.
The two steelmakers moved in opposite directions on almost every line. Jindal Steel grew its sales more than twice as fast as JSW, whose revenue rose 20.7% to ₹54,486 crore, but JSW’s profit more than tripled to ₹5,359 crore while Jindal’s rose by about a fifth. JSW put its gains down to record volumes, partly offset by higher coking coal prices and lower realisations.
The company said its average selling price “improved sequentially, supported by a higher share of flat steel products.” Domestic customers accounted for 92% of its sales, up from 91% in the June quarter.
The shares fell more than 1.7% to about ₹1,012 on Friday, as metal stocks led a broad sell-off on Dalal Street. Investors get their first full session to weigh the numbers on Monday.