JSPL Reports 534% Surge in Q2 Profit, Cites Lower Expenses & Tax Benefits

Jindal Steel & Power Ltd (JSPL) has reported a staggering 534% year-on-year increase in its consolidated net profit for the September quarter, reaching Rs 1,390 crore. This surge can be attributed to lower tax liabilities and a significant drop in other expenses.

The Naveen Jindal-led company, however, faced a 9.2% decline in its consolidated net revenue, which stood at Rs 12,282 crore in the same quarter. Despite this, the company remains optimistic about its prospects.

Bimlendra Jha, the Managing Director of Jindal Steel & Power, expressed his satisfaction with the performance, stating, 'We are happy to see our coal mines finally starting. Shipments from Gare Palma IV/6 are already being received at Raigarh. Our quarterly results are significantly up year on year with sales volumes sustained in a traditionally weak quarter. We expect the demand to be robust in the second half of the current fiscal as India continues to march to a different drumbeat.'

JSPL's financial success can be attributed to its prudent financial management. Other expenses dropped from Rs 4,672 crore in the year-ago period to Rs 3,943 crore during the second quarter of the current fiscal. This is compared to Rs 898 crore in other expenses during the same period last year, with virtually zero expenses in the quarter under review.

The company's adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) for Q2FY24 stood at RS 2,213 crore, representing a significant 19% year-on-year increase. Furthermore, adjusted for RS 73 crore during the quarter, JSPL's net debt increased to Rs 7,313 crore by the end of the September quarter from Rs 6,812 crore at the end of the June quarter of the current fiscal year.

Despite these financial changes, JSPL has maintained a strong production and sales performance. Steel production and sales for the company during the quarter stood at 1.9 million tonnes, marking a 4% year-on-year increase. Pellet production experienced a slight decrease, with 1.89 million tonnes, an 8.69% fall. However, a significant factor in this performance was the increase in the share of exports, accounting for 13% of the quarter's activities.

JSPL has also emphasized its commitment to strengthening its balance sheet while supporting ongoing capital expenditure (capex). The company invested Rs 1,836 crore in capex during the quarter, primarily driven by expansion projects across the country.

JSPL's international ventures have also contributed to its success, with coking coal sales of 234 kilotonnes in Mozambique, 150-kilo tonnes of thermal coal sales, and 83 kilotonnes of product sales in South Africa during the quarter. Additionally, the company reported 162 kilotonnes in dispatches from its Australian venture, although Wongawilli Colliery remains under care and maintenance.

Moreover, JSPL reported that its coal mining operations at Gare Palma IV/6 had commenced, and its Angul pellet plant was in the stabilization phase.