JSL expects volumes to grow by 20% this fiscal

This optimism rides on the resurgence of domestic demand, and the withdrawal of export restrictions by the government in November, Abhyuday Jindal, the company’s managing director, said in an interview.

The company, which declared its earnings on Wednesday, recorded a net profit of ₹659 crore in January-March and profit of ₹2,014 crore in FY23. Alongside, JSL announced a dividend of ₹1.50 per share for FY23, taking the total payout to ₹2.50 a share. This follows a ₹1 per share payout on the successful completion of a merger.

“Our volumes numbers are looking up after the removal of export restrictions by the government. While domestic demand continues to clock good numbers, we expect demand in global markets (exports to the US and the EU) to move upwards starting the second quarter of the current fiscal year, which will help increase our demand,” Jindal said.

JSL has completed a one million-tonne expansion of its stainless steel meltshop capacity, along with its supporting downstream facilities in Jajpur in March 2023. With this development, its total melt capacity now stands at 2.9 million tonnes per annum, in line with its projected timeline. “We are projecting a volume increase of 20% during the current fiscal year,” said Anurag Mantri, group chief financial officer, JSL.

However, the company did not share a break up of the projected volume growth for domestic and international markets.

According to a statement by the company, FY23 was an eventful year. It signed a collaboration agreement with New Yaking Pte Ltd for a 49% stake in its Nickel Pig Iron smelter facility in Indonesia. It also completed the acquisition of Rathi Super Steel Ltd, and started production at the facility much before the deadline.

Jindal, however, said JSL will be taking a break from acquisitions since it wants to first smoothen the operations of the companies it acquired recently. “We would not be looking at any new acquisitions for 18 months, and will wait till our acquisitions stabilise. Subsequently, we would look at companies in India and not beyond – NPI was necessitated since there are no nickel available in India.”

JSL said it has reduced its total debt by about 18% during the last fiscal year, and have brought its debt to ‘healthy’ levels.

Mantri said the debt levels had come down from ₹3,179 crore to ₹2,591 crore by the end of last fiscal.

“This reduction was possible despite new investments during the fiscal. For the current year, our target is to keep it to similar levels by the end of the current fiscal year. We would require fresh loans this fiscal but the total debt by the end of FY24 would be at similar levels,” Mantri said.

The company has received the board’s approval to raise ₹5,000 crore in debt.

This is an ‘enabling provision’ and does not impact JSL’s plan to keep the debt to current levels, company executives said.