India: Jindal Stainless reports mixed Q2FY'25 results: sales decline but profitability improves

Jindal Stainless Limited (JSL) announced its financial results for the quarter ending September 30, 2024, showcasing a mixed performance.

The company reported sales of 564,627 t, reflecting a 2.34% decline on a q-o-q basis. However, its standalone net revenue rose to INR 9,746 crore, marking a 1.68% increase from the previous quarter.

In terms of profitability, JSL achieved a standalone EBITDA of INR 1,007 crore, a slight uptick of 0.25% q-o-q, while the profit after tax (PAT) reached INR 589 crore, up by 1.90% q-o-q. The company's net debt stood at INR 2,580 crore, with a net debt-to-equity ratio of approximately 0.2, indicating a stable financial position.

On a consolidated basis, JSL reported a net revenue of INR 9,777 crore, up 3.68% q-o-q. However, EBITDA decreased by 2.08% to INR 1,186 crore, and PAT fell by 5.67% to INR 609 crore.

Challenges and global market dynamics

In Q2FY'25, the company's standalone sales volume declined due to weak export demand. However, the domestic market showed stable growth, particularly in pipes, lifts, and white goods, with expectations for continued demand through the festive season. Ongoing national projects related to infrastructure and water programs are also anticipated to support steady stainless steel demand throughout the fiscal year.

Imports of subsidized and dumped stainless steel continued unabated in India, particularly from China and Vietnam, undermining local producers, especially in the MSME sector. Imports from Vietnam rose nearly 75% in H1FY'25 compared to H1FY'24. Despite these challenges, Jindal Stainless increased its market share by leveraging competitive pricing and an enhanced delivery cycle.

The export market did not meet expectations due to geopolitical complexities. Although container freight rates have decreased from previous quarters, they remain nearly double their original levels. In Q2FY'25, JSL's export volume was stable compared to Q1, with increases in the US, Middle East, and South Korea. However, exports to the EU fell due to sluggish end-user demand and elevated shipping costs.

Jindal Stainless targets increased sales in Canada

India's Jindal Stainless is aiming to boost sales in Canada, contingent on the North American country imposing duties on Chinese products. Managing Director Abhyuday Jindal highlighted this strategy during a recent announcement, indicating that such duties would facilitate increased volumes in the Canadian market.

"If this duty comes on China then we will be able to push even more volumes into Canada," Jindal said at a post-results news conference.

Highlights:

• Jindal Stainless commissioned a Nickel Pig Iron smelter facility in August 2024, eight months ahead of schedule, in the Halmahera Islands, Indonesia.
  
  
• The company supplied high-strength tempered 301L grade stainless steel for Vande Bharat sleeper coaches, unveiled by Railway Minister Ashwini Vaishnaw in September.
  
  
• Jindal's Hisar plant received a five-star rating for occupational health and safety from the British Safety Council.
  
  
• The company partnered with CJ Darcl Logistics to create lightweight, sustainable stainless steel containers and supplied stainless and low-alloy steel for satellite launch vehicles to ISRO and motor casings for small satellite launch vehicles to HAL.
  
  

Outlook

Abhyuday Jindal, Managing Director of Jindal Stainless, emphasized that India's growth is a key driver for domestic manufacturing, particularly amid global uncertainties impacting exports. He welcomed the government's focus on using stainless steel in critical infrastructure to enhance safety. Looking ahead, Jindal is optimistic about volume growth in the domestic market but calls for action against subsidized imports from China and Vietnam, which threaten fair competition for Indian manufacturers.