Jindal Steel and Power Q3FY14 Results Observe a Sharp Decline In PAT

Jindal Steel and Power (JSPL), part of O.P. Jindal group, posted today (January 28, 2014) its quarterly result of the quarter ending December 2013. On consolidated basis JSPL recorded sales of Rs 5377.37 crore for Q3FY14, which is up by 12% recorded in the last year same quarter. Profit after tax, however, saw a sharp decline of 36% in the same period and stood at Rs 559.21 crore in Q3FY14.

JSPL, increase in sales was aided by better performance by its both segments namely Iron & Steel and Power which contributes around 75% and 19% respectively, rest is contributed by others. Sales volume of Iron & Steel was up by 2.5% on yearly basis and stood at 764511 tonnes for Q3FY14. The realisations too increased by 2% on yearly basis. The combined impact of increase in volume and realisation helped the segment to report overall growth of 9% in sales on yearly basis. 

The total power generation too went up by 18% on yearly basis and total power generation for the quarter was 2116.4 million units. Better Plant Load Factor (PLF) of 95.9% for the quarter compared to 81.1% in the same quarter last year helped company to record 6% increase in sales on yearly basis. 

Nonetheless, JSPL could not carry its momentum in EBIDTA that fell by 5% on yearly basis to Rs 1701 crore for the Q3FY14. The reasons for such fall in the EBITDA was increase in total expenditure especially other expenses which was up by 22% on yearly basis and stood at Rs 769.2 crores for Q3FY14, while total expenses were up by 21%. The overall EBIDTA margins fell by almost 600 basis points.

Lower EBITDA, higher depreciation and finance expenses pulled down the net profit of the company on consolidated basis. Depreciation of JSPL has increased by 21% on yearly basis to stand at Rs 459 crore for Q3FY14. Finance cost too has gone up by 56% on yearly basis and stood at Rs 429 crore for the quarter. Total profit of JSPL plunged by 35.6% on yearly basis and stood at Rs 559.21 crore for Q3FY14. 

The net earnings per share of JSPL came at Rs 6.02 for the Q3FY14 and last trailing twelve month earnings per share came at Rs 24.31, which discounts current share price by 10.53 times.