Updated January 31st, 2024 at 20:13 IST
Jindal Steel & Power posts strong Q3 profit despite sales dip
The company reported a consolidated net profit after tax of Rs 1,928 crore for Q3 FY24, compared to Rs 518 crore in the corresponding period a year ago.
Jindal Steel Q3 results: Steel major Jindal Steel and Power, posted a remarkable nearly four-fold increase in third-quarter profit on Wednesday. The robust performance, which surprised analysts, was attributed to lower costs that offset a decline in sales. The company reported a consolidated net profit after tax of Rs 1,928 crore for the three months ending December 31, compared to Rs 518 crore in the corresponding period a year ago.
The company highlighted that lower raw material costs played a pivotal role in its impressive performance, with benefits from captive thermal coal mines materialising. Despite a 6.3 per cent decline in sales and services revenue, totalling Rs 13,756 crore, the strategic utilisation of commissioned coal mines helped mitigate the impact of higher costs associated with key steelmaking raw materials, particularly coking coal during the quarter.
Analysts had earlier indicated that Jindal Steel's commissioned coal mines would enable the company to address its thermal coal requirements efficiently, thereby offsetting the challenges posed by elevated costs in coking coal.
Input costs for the company experienced a notable 3 per cent decrease, amounting to Rs 4,806 crore in the December quarter. This cost reduction, coupled with strategic initiatives, contributed significantly to the positive bottom-line results.
Earlier this month, Jindal Steel's larger rival, JSW Steel, reported a substantial five-fold increase in profit for the December quarter, driven by robust domestic demand. Shares of Jindal Steel settled 1.5 per cent higher ahead of the results, reflecting a degree of optimism among investors regarding the company's financial performance.
(With Reuters inputs.)
Published January 31st, 2024 at 20:13 IST
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