The company reported a consolidated profit of Rs 7,179 crore in the corresponding quarter last year.
Revenue improved by 29% year-on-year to Rs 41,778 crore. However, high input costs meant that the earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 83% on-year to Rs 1,752 crore. EBITDA margin narrowed from 32% to 4.2%.
“The company’s performance during the quarter was significantly impacted by a sharp fall in steel prices, while (the) benefit of lower raw material prices will flow through with a lag,” the company said in a statement.
The prices of steel in the domestic market have declined by over 40% compared to the high reached in April. The prices have been particularly hit by a 15% export duty on steel levied in May by the government to rein in domestic inflation.
JSW Steel’s production during Q2 was at 5.68 million tonnes, sequentially lower by 3%, attributable mainly to extended maintenance shutdowns at one of its subsidiaries due to low domestic demand as well as subdued market conditions in the USA.
The company’s 5 million tonne per annum (mtpa) capacity expansion at Dolvi continued to ramp up and achieved average capacity utilisation of around 80% compared to 60% in the preceding quarter, the company said.
Looking ahead, the company said that despite a challenging global economic scenario, it expects healthy steel demand growth in India during the latter half of FY23, which along with flow through of lower raw material prices should aid its performance in the upcoming quarters.
The stock of
declined 1.03% to close at Rs 622 on the BSE Friday compared to a marginal increase in the benchmark Sensex. The results were declared post market hours.