MUMBAI: JSW Steel has said its in consolidated net income plunged a whopping 85 percent to Rs 404 crore in quarter to September weighed down by cheap imports of finished steel, which dragged domestic prices to three-year lows.
In the year-ago quarter, the company had booked Rs 2,773 crore in consolidated net profit.
The price decline had the Sajjan Jindal-led firm’s revenue falling by 11 per cent to Rs 39,684 crore as dumping hurt prices. The company also had an exceptional charge of Rs 342 crore due to its decision to surrender an iron ore mine in Keonjhar in Odisha.
According to a statement by the company Friday, it has recognised a provision of Rs 342 crore for surrending the Jajang iron ore mine towards inventory and site restoration.
Revenue from operations fell 11 per cent to Rs 39,684 crore as against Rs 44,584 crore, with JSW Steel noting a "sharp" fall in realisations in the quarter, as prices struggled under huge imports. The operating margins were down to Rs 5,437 crore, or only 13.7 per cent as against 17.7 per cent in the corresponding quarter a year ago, and 12.8 per cent in the June quarter.
The results come amid a 39 per cent correction in the domestic hot rolled coil prices from their peak in April 2022.
While domestic demand remains robust, fueled by rising consumption in the automotive and construction sectors, analysts at the Japanese brokerage Nomura say weaker realisations are likely to pressure margins for leading steel producers.
The reporting quarter is typically the weakest for steelmakers as monsoons hamper construction activities. This year challenges were heightened by a surge in cheaper Chinese imports flooding the market.
Steel firms, however, expect relief from dumping with China's latest stimulus measures to bolster its economy.
The JSW Steel counter closed 1.6 per cent down on the BSE at Rs 943.15.