JSW Steel Q1 results: Net profit plunges 86% YoY to Rs 838 cr on steel export duty

JSW Steel consolidated net profit for the quarter ending 30 June, 2022 plunged as much as 85.8 per cent year-on-year to Rs 838 crore on back of adverse impact of falling global prices and imposition of 15 per cent duty on steel exports.

The company had reported a net profit of Rs 5,904 crore in the year-ago period.

Sequentially, the profit slumped 74.4 per cent from Rs 3,234 crore in the March quarter.

Revenue from operations increased 31.7 per cent to Rs 38,086 crore in the quarter under preview in comparison with Rs 28,9002 in the last year period.

JSW Steel noted that the domestic steel industry was impacted by falling global prices and the imposition of a 15 per cent duty on certain steel exports in May 2022 further exacerbated the situation with a steep fall in exports, of 26 per cent quarter-on-quarter. "The export duty on steel products is expected to be a temporary measure to contain inflation and may be removed once inflation cools down," it added in the regulatory filing.

Inherent demand from auto and construction and infrastructure segments remains strong that should support overall steel consumption during FY23, it said, adding that India's steel consumption during Q1FY23 was 27.36 million tonnes, down 5.6 per cent QoQ, while exports fell 26 per cent to 2.88 million tonnes due to the weaker global demand and imposition of export duty.

The steel making company also added that considering volatile market conditions, it pre-poned certain shutdowns that were scheduled during the year, which lowered the average capacity utilization (excluding Dolvi Phase-II) for 01 FY23 to 93 per cent from 98 per cent in Q4FY22. The 5mtpa Dolvi Phase-II expansion continued to ramp up and will drive volume growth as demand recovers in the coming quarters.

Shares of JSW Steel on Friday closed 0.99 per cent lower at Rs 582.35 apiece on BSE.