India’s JSW Steel Expects Margins to Revive After Surprise Loss

India’s JSW Steel Ltd. expects its margins to recover in the year’s second half, underpinned by strong domestic demand and stabilizing prices, after it posted a loss last quarter.

Costs of key input materials have started easing, which will be reflected in earnings for the current quarter, according to Seshagiri Rao, joint managing director at the Mumbai-based mill. Global prices are stabilizing due to mills cutting production, he added.

“Domestic demand is very, very strong in India,” Rao said in an interview with Bloomberg Television. “So there will be more volumes and lesser cost of production, stable steel prices and a very strong domestic steel demand. All these four together, we expect the second half to be much better and our margins will get normalized.”

India’s consumption grew more than 11% in the April-September period and JSW is ramping up its production capacity to cater to growing demand, Rao said.

The mill, led by tycoon Sajjan Jindal, last week reported a loss in the July to September period, driven by a sharp slump in prices and high costs of raw materials and power.