Jindal Stainless Q1 net profit up 8%, price hikes offset cost surge

Mumbai: Production at Jindal Stainless, the country’s largest producer of stainless steel, dipped during the June quarter due to disruptions caused by the West Asia conflict, according to senior management. However, they said that price increases implemented during this period helped ease some of the cost pressures.

On Monday, the New Delhi-headquartered company said its consolidated net profit for the June quarter increased by nearly 8% from a year ago to 769 crore, while consolidated revenue rose by 10% to 11,279 crore. The topline increased despite sales volume for the quarter dropping by more than 7% to 5,80,805 tonnes.

“The primary reason (for the lower sales volume) was the disruption because of the war,” managing director Abhyuday Jindal said. “We depend a decent amount on LPG and propane, and most of that comes from the Middle East. So the initial few weeks of this quarter, there were severe disruptions in our production,” Jindal said in a post-earnings call. Power and fuel costs during the quarter surged by nearly 75% year-on-year to 1,176 crore.


Jindal Stainless operates two integrated manufacturing plants—one at Hisar in Haryana and the other at Jajpur in Odisha. Both plants primarily use propane and LPG for fuel. The company increased the usage of piped natural gas at its plant in Odisha, which helped absorb some of the cost shocks from LPG.

“The situation remains uncertain, but now the things are still far better,” chief executive officer Tarun Khulbe said. “We were able to pass some of the cost increase to customers because of our price increases.”

Average realisations for the quarter were around 10% higher compared with the previous year, he added.

Despite the cost pressures, Jindal Stainless’ consolidated earnings before interest, tax, depreciation and amortisation rose by 1.5% year-on-year to 1,329 crore. Its exports accounted for 11% of its total sales for the quarter.

The company’s consolidated net debt at the end of the quarter stood at Rs 2,950 crore, down from Rs 3,040 crore at the end of March, while the net debt-to-EBITDA ratio stood at 0.53 times, down from 0.55 times in the previous quarter.

Jindal Stainless reported its earnings during market hours. Its shares closed 0.6% lower on the BSE at Rs 729.80.