By Manvi Pant and Hritam Mukherjee
(Reuters) -India’s JSW Steel reported a bigger-than-expected drop in third-quarter profit on Friday as lower prices and tepid demand continued to hurt the country’s top steelmaker.
Domestic steel mills have grappled with an influx of steel imports from China over the past year, with shipments hitting an all-time high in the April-December period, a 35.4% increase year-on-year.
“We expect to achieve 98% of our volume guidance of 28.4 million tonnes in fiscal 2025,” CEO Jayant Acharya said on a post-earnings call on Friday.
Chinese steel sells for $25 to $50 per metric ton cheaper than domestic steel and sometimes as much as $70 cheaper, Reuters reported last month.
JSW Steel expects lower Chinese steel imports in the ongoing quarter, which will lend support to prices, Acharya added.
The company’s consolidated net profit plunged 70% year-on-year to 7.17 billion rupees (about $83 million) for the quarter ended Dec. 31, missing the average analyst estimate of 9.28 billion rupees, according to data compiled by LSEG.
JSW Steel’s sales volumes, however, picked up during the third quarter, helped by strong sales in the renewable energy sector and appliances and tinplate businesses.
That resulted in revenue from operations falling only 1.3% to 413.78 billion rupees, compared with estimates of 408.87 billion rupees.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 22% to 55.79 billion rupees for the quarter, but was above estimates of 50.97 billion rupees.
“Higher sales volumes and lower coking coal cost – a key steelmaking raw material – helped arrest the fall in EBITDA,” said Parthiv Jhonsa, lead analyst for metals and mining at brokerage Anand Rathi.
JSW Steel is the first in the sector to report its results, with Tata Steel set to announce its quarterly earnings next week.
($1 = 86.1990 Indian rupees)
(Reporting by Manvi Pant and Hritam Mukherjee in Bengaluru; Editing by Sonia Cheema, Janane Venkatraman and Shounak Dasgupta)
