JSW Steel Ltd. reported a lower-than-expected increase in its quarterly profit as raw material prices and energy costs soared at India’s most valuable mill.
- Group profit at the Sajjan Jindal-led company was 43.6 billion rupees ($586 million) during the October-December period, compared with 26.8 billion rupees a year earlier, it said Friday in an exchange filing. That came below an analysts’ estimate of 48.4 billion rupees. Sales rose 74% year-on-year to 380.7 billion rupees.
Key Insights
- While Indian steel mills have seen bumper profits in the past year due to a rally in prices and strong demand, analysts are now turning cautious on the outlook for the sector as steel prices weaken and costs of raw materials increase.
- JSW Steel reported a 77% jump in costs during the quarter. Costs were inflated primarily by higher coking coal and power prices, it said in a statement.
- JSW Steel’s group production during the quarter climbed 28% from a year earlier to 5.35 million tons.
- Capacity utilization at its Indian mills was 94% during the quarter.
- The company is optimistic about the outlook as the latest surge in virus infections in India has so far been less severe than previous waves, and industrial activity remains supported by government spending and healthy global demand.
