Week Q1 performance, Jindal Steel is trading 6 per cent lower

Jindal Steel and Power is operating in segments like Steel, Power, Mining, Coal to Liquid, Oil & Gas and Infrastructure. Its products include rails, parallel flange sections, plates and coils, wire rods, power, ferrochrome and sponge iron.

Recently, Jindal Steel announced its Q1FY16 result, the total income reduced by 11 per cent to Rs 4426.32 crore compared to Rs 4978.38 crore on yearly basis. In the June quarter, the steel production grew by 37 per cent year-on-year to 1.1 million tonnes (MT), which was possible due to enhanced capacity utilisation of Angul and Oman Steel plants. During the quarter, Jindal Steel sold 1.1 MT of steel and registered a growth of 39 per cent on Y-o-Y basis.

Total expenses rose by 3.45 per cent to Rs 4155.24 crore y-o-y. EBITDA declined by 37.53 per cent to Rs 1011.64 crore, due to lower utilisation of plant and higher coal costs. The EBITDA margin contracted by 973 basis points to 22.99 per cent. Depreciation increased by 11.91 per cent to Rs 746.56 crore compared to Rs 667.12 crore.

EBITDA impacted due to lack of captive coal as coal mines were de-allocated on March 31, 2015 and lower merchant prices impacted Plant Load Factor.

Other income reduced by 17 per cent, while finance cost increased by 59 per cent to 851.58 crore on a y-o-y basis. Jindal Steel & Power reported a consolidated net loss of Rs 339.26 crore for the April-June quarter against profit of Rs 418.13 crore in the year-ago period due to higher depreciation and finance costs

On the loss, the firm said, “Consolidated PBT and PAT continues to be impacted due to higher Depreciation of Rs 747 crore and finance cost of Rs 852 crore.” JSPL is planning to sell its non-core assets to reduce debt burden.

FII holding increased by 53 basis points to 19.19 per cent. DII holding reduced by 128 basis points to 2.72 per cent.

After posting the poor results, today JSPL is trading around 6 per cent lower at Rs 72.