Profit before tax (PBT) surged 290.86% to Rs 9,791 crore in Q2 September 2021 over Q2 September 2020. The company registered highest ever quarterly operating EBITDA of Rs 10,417 crore, with an EBITDA margin of 32%. Total expense jumped 43.07% to Rs 24,261 crore during the period under review.
During the quarter, the company's cost of raw material jumped 48% year-on-year to Rs 12,329 crore amid the ongoing commodity inflation. Mining premium and royalty expense surged 270.28% to Rs 2,492 crore while power and fuel expense rose 68.04% to Rs 2,361 crore.
Net cash from operating activities rose to Rs 7460 crore as on 30 September 2021 compared with Rs 5730 crore as on 31 March 2021.
The company's consolidated net gearing (net debt to equity) stood at 0.92x at the end of the quarter (as against 1.04x at the end of Q1 FY2022) and Levg (net debt to EBITDA) stood at 158x (as against 1.89x at the end of Q1 FY2022).
On a consolidated basis, saleable steel sales for the quarter stood at 3.83 million tonnes (Indian operations excluding JVs), an increase of 10% QoQ. The company enhanced exports by 22% QoQ to partially offset the fall in domestic demand due to seasonality.
The company registered strong VASP (value-added & special products) volume, with share of VASP at 60% (vs. 61% in Q1 FY2022 and 51% in Q2 FY2021), driven by increased domestic sales to automotive, solar and appliance segments. VASP volumes were also boosted by robust export demand for coated products.
During the quarter, the performance of Bhushan Power & Steel (BPSL) improved significantly, driven by an increase in sales volumes. The share of profit from JVs for the quarter stood at Rs 603 crore, an increase of 86% QoQ (Q1 FY2022: Rs 323 crore).
During the quarter, the company spent Rs 3,639 crore on capex, against a total planned capex spend of Rs 18,240 crore for FY2022.
In its outlook, JSW Steel said that construction and Infrastructure activities are expected to gain momentum in the second half of FY2022. Strong direct and indirect tax revenues reflect an economic revival, and bode well for additional capital spending by the government.
Government initiatives and benign longer term trends are likely to aid revival of investment growth in India. The Indian residential real estate market has shown steady improvement. A turn in the real estate cycle augurs well for increased construction activity.
However, high inflation and re-emergence of Covid cases could pose a risk for the economic recovery, the company added.
JSW Steel, the flagship business of the diversified JSW Group, is India's leading integrated steel company with a steel-making capacity of 28 MTPA in India & USA, including capacities under joint control & new capacity to be commissioned at Dolvi during this year.
Shares of JSW Steel fell 1.74% to Rs 673.45 on Thursday. The stock hit a high of Rs 695.85 and a low of Rs 655.05 during the day.
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