Jindal Steel & Power has reported a 67.91 per cent year-on-year (YoY) drop in consolidated net profit to Rs 518.67 crore in Q3FY23 on higher input cost and lower steel prices. In the year-ago period, profit was at Rs 1,616.67 crore.
Revenue from operations on a consolidated basis at Rs 12,452.44 crore declined by 0.57 per cent over the same period last year. A poll of analysts by Bloomberg had estimated revenues at Rs 13,105.9 crore and net income at Rs 1,004 crore.
On a standalone basis, the company recorded revenues of Rs 11,832.25 crore and a net loss of Rs 4,512.27 crore. The company said that it had created a provision of Rs 7,253 crore towards diminution in value of its investments in its wholly owned subsidiary, Jindal Steel & Power (Mauritius).
Bimlendra Jha, managing director, JSPL, explained that it was a non-cash write-off. “These investments were in assets abroad where intrinsic value had been reassessed by our auditors. It is a major one-time clean-up exercise that we have undertaken.”
After a two-year rally, steel prices started sliding from the first quarter of the financial year. However, Jha pointed out that quarter-on-quarter there was a more than 50 per cent improvement in EBITDA.
On the outlook for Q4, he said, “Steel and raw material prices have firmed up. China is opening up and in India year-on-year demand growth has been approximately 12 per cent. This is mainly due to the focus of the government on infrastructure and we don’t see this going away,” he said.
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