JSW Steel net profit plunges 19% in Oct-Dec quarter

Steel

Hit by rupee volatility and costlier raw materials, JSW Steel's net profit declined by 19 per cent to Rs 137 crore in the October-December quarter.

The dip is notwithstanding higher sales and revenue over the same quarter last fiscal, in which the company had reported a net profit of Rs 168 crore, JSW Steel said in a statement today.

Buoyed by 14 per cent rise in steel sales to 2.17 million tonnes, net sales increased by five per cent to Rs 8,275 crore during the October-December quarter, over Rs 7,860 crore in the same period last year, it said.

The company faced short supply of iron ore, high alumina & manganese costs, and "unreasonable prices for iron ore in E-auctions" during the quarter, the Sajjan Jindal led steel maker said.

"Due to four per cent depreciation in the value of rupee against US dollar during Q3 FY'13, the loss of Rs 267 crore on restatement of foreign currency monetary items at close of the quarter has been provided," the company said.

Total expenses of the private steel company went up to Rs 7,476 crore during the quarter against Rs 7,068 crore a year earlier.

The cost of finance also rose to Rs 455 crore from Rs 327 crore.

JSW Steel, however, hopes the subdued economic growth of the country to "turn around" in 2013-14 fiscal, which in turn would rev up the demand for steel.

"... while imports, mainly from FTA countries, remain a concern. Pragmatic policies on iron ore mining, speeding up of infrastructure projects and expected interest rate cut by RBI will boost demand for steel," it said.

Shares of the company today settled marginally higher at Rs 871 apiece on the BSE.

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