Jindal Stainless revenue up 36% YoY
The audited financial results of Jindal Stainless (Hisar) (JSHL) for Q4FY21 were taken on record by its Board of Directors here today. The Company registered higher sales volume owing to a revival in domestic demand for stainless steel. JSHL’s sales volume stood at 182,474 tonnes, up by 23 per cent over the corresponding period last year (CPLY). EBITDA and Profit after tax (PAT) of the company stood at Rs 364 crore and Rs 226 crore, respectively. Consistent deleveraging helped in the reduction of long-term debt by INR 387 crore during Q4FY21, which stood at Rs 1,250 crore. Interest cost fell by 39 per cent over CPLY to Rs 42 crore.
Improved business sentiments, along with sustained growth in the domestic economic activity, triggered stainless steel demand from segments like Auto, Railways, and Wagon, along with Metro Rail. Sales of JSHL’s Specialty Products Division (SPD), a key differentiator and focus area for the Company, grew by 8% in Q4FY21 over CPLY. The company is in process of commissioning new facilities to further enhance SPD production that is expected to further consolidate its position in the high-end special products market.
Globally, the pandemic left imprints on the stainless steel melt shop production in every country other than China. The global stainless steel production stood at 50.90 million tonnes in CY2020, down by 2.5 per cent over CPLY. Indian stainless steel production decelerated by 19 per cent over CPLY and stood at 3.17 million tonne in CY2020. Pent Up in demand aided by economic stimulus along with ample liquidity globally pushed the stainless steel raw material prices further. As a result, the prices of Scrap, Nickel, Copper, and Ferro Chrome surged significantly over the Q3FY21 prices. Logistical challenges, generated by international transport bottlenecks, also contributed to increasing input prices. Strong momentum in the raw material prices impacted prices of finished goods globally.
Other key developments:
The merger process of JSHL into JSL is in the advanced stage. Necessary approval for the merger has been granted by the stock exchanges and SEBI to the Company ahead of the time limit. Presently, the first motion application has been filed by the company before the National Company Law Tribunal.
After the government suspended the Countervailing Duty (CVD) on China and revoked the provisional CVD on Indonesia in the latest Union Budget, the domestic industry is expecting a significant rise in imports during the current FY. Unfairly priced imports from Indonesia and China are likely to distort the domestic market especially the MSME manufacturers.
Based on a healthy liquidity position, debt reduction plan, and proposed merger synergies, long-term credit facilities of JSHL were assigned IND A/RWE rating by India Ratings and Research (Ind-Ra). JSHL’s short-term credit facilities were assigned IND A/RWE/INDA1 by the agency. The agency maintained its rating despite pandemic-induced disruptions in past quarters.
The Company has supported Haryana government by converting the OP Jindal Modern School in Hisar into an emergency COVID hospital. This 500-bed COVID hospital was inaugurated on May 16, 2021, and was completed in a record time of two weeks. All 500 beds are equipped with oxygen, supplied by JSHL‘s oxygen plant. Since the onset of the pandemic in 2020, JSHL has been consistently supplying LMO of ~9.5 MT per day to all medical facilities in and around the plant. As of today, the plant is supplying 50+ medical facilities in Haryana and Delhi-NCR. To support the government’s relentless efforts, JSHL has also dedicated a 125-bed Isolation Ward and two Negative Pressure Isolation Rooms with 200 beds for COVID-19 patients in Jindal Institute of Medical Sciences, the 580-bedded multi super-specialty hospital in Hisar, Haryana.
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