India: Jindal Stainless reports strong Q1FY'25 performance, expands strategic initiatives

Jindal Stainless Limited (JSL) has announced its financial results for the quarter ending June 30, 2024, showcasing robust performance and significant strategic advancements.

JSL reported its Q1FY'25 sales at 578,143 tonnes (t), up 1.4% from Q4FY'24. Standalone net revenue stood at INR 9,585 crore, a 0.7% q-o-q increase.

EBITDA and PAT saw significant growth, rising ~21% q-o-q to INR 1,004 crore and INR 578 crore, respectively. The company maintained a robust balance sheet with standalone net debt at INR 3,296 crore and a net debt-to-equity ratio of ~0.23. Consolidated net revenue was INR 9,430 crore, with PAT at INR 646 crore.

Challenges and global market dynamics

The company faced stagnant growth in the US and EU markets resulting in flat export volumes q-o-q. Export operations were also impacted by the Red Sea crisis, which extended transit times and increased freight costs. Despite these challenges, JSL effectively managed cost risks due to its reliance on nearby and domestic raw material sources. The company has also restricted volumes in price-sensitive segments due to cheap imports from China and Vietnam.

Highlights:

Stainless steel for 100 Indian freight wagons: The company has successfully supplied special stainless steel for the production of 100 'Made in India' freight wagons for Mozambique.

JVs and expansions: JSL also announced a comprehensive expansion plan involving an investment of approximately INR 715 crore in a joint venture to develop a stainless steel meltshop in Indonesia with an annual production capacity of 1.2 million tonnes (mnt). Further investments of INR 1,900 crore and INR 1,450 crore are earmarked for expanding downstream lines and upgrading infrastructure in Jajpur, Odisha. Additionally, JSL has completed the acquisition of Chromeni Steels Private Limited for over INR 1,600 crore, enhancing its cold rolling capacity in Mundra, Gujarat.

Co-branding boosts domestic growth: In the domestic market, JSL's co-branding initiative, Jindal Saathi 5.0, has driven growth in the ornamental pipe and tube segment. The company is planning similar schemes in other customer-facing segments, and the government's focus on infrastructure is resulting in strong demand for metro and coach projects.

Outlook:

Managing Director Abhyuday Jindal expressed optimism about the company's growth trajectory. The removal of the basic customs duty on ferro nickel is expected to enhance domestic competitiveness. The company's strategic expansions and the integration of Chromeni's cold-rolling capacity are anticipated to drive growth. With increasing awareness of stainless steel's advantages, JSL is well-positioned for further success in the coming years.