JSPL Q1 Results: Net profit drops 14% to Rs 1,686 crore but beats estimates

Jindal Steel & Power (JSPL) reported a decrease of 14.4 percent year-over-year in consolidated net profit to Rs 1,686.94 crore for the June quarter of fiscal year 24 due to a decrease in operating profits and a lacklustre top line performance.

Nevertheless, despite the decline, JSPL's bottom-line performance was well above projections. For Q1FY24, the consensus estimate from Bloomberg was Rs 688.7 crore for net income.

The company reported a net profit of Rs 1,970,03 crore in the corresponding quarter of the previous fiscal year.

Comparing the current quarter to the same period a year ago, quarterly revenue decreased by 3.5% to Rs 12,583.0 crore from Rs 13,045.4 crore. The consensus estimate from Bloomberg was Rs 12,778,600 million.

Prior to the release of the results, on August 11 the NSE steelmaker's stock rose 2.59 percent to close at Rs 693.90 per share.

The company's sales amounted to $1.84 million, an increase of 6% year-over-year but a decline of 9% sequentially due to seasonally poor domestic demand.

During the quarter, the proportion of exports remained relatively unchanged at 10 percent, compared to 11 percent in the same period of the prior year.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter totaled Rs 2,628.04 crore, down 23.6% year-over-year. The estimated EBITDA, according to Bloomberg, was Rs 2,125.8 crore.

Meanwhile, EBITDA margins decreased to 20.8% for the quarter ending June 30 compared to 26.4% for the corresponding quarter of the prior year Other notable features:

JSPL continued its deleveraging efforts and decreased its net debt by Rs 141 crore during the quarter, bringing it to a 15-year low of Rs 6,812 crore as of 30 June 2023. During the period under review, the ratio of net debt to EBITDA was 0.75, compared to 0.70 on March 31.

The balance sheet continued to improve while capital expenditures continued. The total capex for the quarter was Rs 1,899 crore, primarily due to the expansion projects in Angul. At Rs 6,812 crore, the consolidated net debt represented a 15-year low. As of June 30, 2023, the ratio of net debt to EBITDA was 0.75.

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