New Delhi: The Board of Directors of Jindal Stainless Limited (JSL) today announced the company’s unaudited financial results for the third quarter of fiscal year 2022. JSL continued to generate profitable growth by leveraging the export market while maintaining overall sales levels year-over-year. A wide range of products that adapts to market requirements helps companies remain flexible and responsive to customer needs. On a consolidated basis, JSL’s revenue was INR 56.7 crore in Q3 2022. EBITDA and PAT were INR 7.97 billion and INR 4.42 billion respectively. JSL’s own revenue, EBITDA and PAT increased by 56%, 66% and 145% respectively. Net external debt stood at INR 17.62 crores as of December 31, 2021, with a strong debt/equity ratio of around 0.7.
The company maintains a dominant position in the field of elevators and escalators. Capitalizing on bullish demand from the industrial and construction sectors, JSL is also working closely with various government infrastructure projects where stainless steel is the preferred alternative to life cycle costing methods. As part of its increased share of value-added products, JSL increased sales of its specialty grades (eg duplex, super austenitic) and checkered sheets. The company supplies value-added specialty varieties for the Dahej Desalination Plant, the Assam Biorefinery, the HURL Fertilizer Plant and the Fleet Mode Nuclear Project, among others. However, a shortage of semiconductors in the passenger car segment and moderate demand in the two-wheeler segment led to a slight decline in the automotive industry during the quarter. The pipe and tubing segment also saw a slight decline due to lower-than-expected market demand and higher raw material prices.
In response to subsidized imports of stainless steel from China and Indonesia, which nearly doubled this year, JSL has strategically increased its share of exports from 15% in Q3 FY 2021 to 26% in Q3 FY 2022. On an annualized basis, the share of domestic exports in quarterly sales is as follows:
1. The impact of the Union budget for 2021-2022 to phase out the use of CVD for stainless steel products in China and Indonesia has hurt the domestic industry. Imports of stainless steel flat products in the first nine months of FY22 increased by 84% compared to the average monthly imports in the previous FY22. Most imports are expected to come from China and Indonesia, with year-to-date imports up 230% and 310% respectively in 2021-2022 compared to the monthly average in 2020-2021. The 2022 budget, released on February 1, once again supports the elimination of these tariffs, apparently due to high metal prices. Between July 1, 2020 and January 1, 2022, prices for carbon steel scrap increased by 92% from $279 per ton to $535 per ton, while stainless steel scrap (grade 304) increased by 99% from EUR 935 per ton. ton to $535 per ton. €1,860. Prices for other raw materials such as nickel, ferrochromium and iron ore nuggets also rose by around 50%-100%. Commodity prices continued to rise in the third quarter of fiscal 2022, with nickel up 23% year on year and ferrochromium up 122% year on year. From July 1, 2020 to January 1, 2022, the price of stainless steel products such as cold rolled coil (grade 304) increased by 61%, but this increase was lower than price increases of 125% and 73%, respectively. In China, prices rose by 41%. The decision to eliminate tariffs will affect the survival of MSME stainless steel producers, which make up 30% of the manufacturing ecosystem, due to increased subsidies and dumped imports.
2. CRISIL Ratings has upgraded JSL Bank’s long-term credit rating from CRISIL A+/stable to CRISIL AA-/stable, while affirming the bank’s short-term credit rating of CRISIL A1+. The upgrade reflects a significant improvement in JSL’s business risk profile and continued improvement in the company’s operating efficiency, driven by higher EBITDA per tonne. India Ratings and Research also upgraded JSL’s long-term issuer rating to ‘IND AA-’ with a stable outlook.
3. The company’s application for a merger with JSHL is under consideration by the Hon. NCLT, Chandigarh.
4. In December 2021, the company launched India’s first hot rolled ferritic stainless steel plate sheet under the brand name of Jindal Infinity. This is Jindal Stainless’s second foray into the brand category after the launch of its joint stainless steel pipe brand, Jindal Saathi.
5. Renewable energy and ESG operation: The company has successfully introduced waste heat steam production, heating and annealing furnace by-product coke gas, industrial process wastewater treatment, more steel recycling and other CO2 reduction processes. transport Deployment of electric vehicles. JSL has invited renewable energy providers to provide their requirements and has received proposals that are currently under evaluation. JSL is also looking into opportunities to produce and use green hydrogen in its manufacturing process. The company intends to integrate the robust strategic framework of ESG and Net Zero into its overall corporate strategy.
6. Project update. All brownfield expansion projects announced in the first quarter of FY 2022 are progressing on schedule.
On a quarterly basis, Q3 2022 revenue and PAT increased by 11% and 3%, respectively, due to higher global commodity prices. Although 36% of the domestic market is occupied by imports, JSL has maintained its profitability by improving its product range and export program. Interest expense was INR 890 crore in Q3 2022 compared to INR 790 crore in Q2 2022 due to higher working capital utilization in Q3 2022.
For nine months, 9MFY22 PAT was Rs 1,006 crore and EBITDA was Rs 2,030 crore. Sales were 742,123 tons and the company’s net profit was Rs 14,025 crore.
Commenting on the company’s performance, Mr. Abhyudai Jindal, Managing Director of JSL, said: “Despite intense and unfair competition from imports from China and Indonesia, a well-thought-out product portfolio and ability to expedite exports have helped JSL remain profitable. We are always on the lookout for stainless steel applications New opportunities for us to stay ahead of the competition and increase our market share in both domestic and export markets A strong focus on financial prudence and a solid operating foundation have served us well and we will continue to develop our business strategies based on market dynamics”.
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