JSPL Q1FY'20 Results - Key Takeaways

Jindal Steel and Power Limited (JSPL), one of India's leading steel producer has reported steel output and sales figures for Q1FY'20 (Apr'19- Jun'19) results. Below mentioned are the takeaways from company's standalone quarterly report and earnings conference call.

1. Crude steel production inch down against last quarter- The company's crude steel production marginally fell by 3% Q-o-Q to 1.46 MnT in Q1FY'20 in comparison with 1.51 MnT in Q4FY'19 (Jan'19-Mar'19). Production of steel & steel related products stood at 1.57 MnT in Q1FY'20.

2. Increase in EBIDTA- The company's EBIDTA increased by 12% stood at INR 1,608 cr in Q1FY'20 which was INR 1,440 cr in the preceding quarter.

3. Sharp increase in sales of rails- In Q1'FY20, rails sold were more than double as compared to same period last year. The company's steel supply to Railway projects spiked by 126% Y-o-Y in Q1FY'20.

4. Increased steel & related products sales- Steel & related products volumes witnessed at 1.51 MnT, ascended by 16% Y-o-Y in Q1FY'20 as against 1.30 MnT in Q1FY'19.

5. On lifting of iron ore stocks from Sarda mines- Owing to lack of necessary clearances, Sarda mines had been closed since Apr'14. After a long gap of 2 years, on 8 Apr'16, Odisha High Court ordered the steelmaker to lift its iron ore stocks (for which royalty is already paid) lying at Sarda Mines. However the matter is in Supreme Court and the discussions are in advanced stage, however final decision is still awaited.

6. Expect to start operations at DRI plant by Oct'19- DRI plant in Angul is expected to commence operations in Oct'19.

7. Coking coal cost to come down sharply- Blended Coking coal cost is expected to move down by around USD 30/MT following decline in global prices.

8. Pellet production stable on yearly basis- During Q1FY'20, production of pellets was maintained at 1.76 MnT, similar to same period last year.