Jindal Steel & Power’s (JSP’s) steel output and sales volumes in financial year 2024 (FY24) remained largely stable on the year. The total capital expenditure for Q4FY24 amounted to INR 2,523 crores, bringing the total for FY24 to INR 8,517 crore. During the year, the company successfully commissioned a 6 mtpa (million tonne per annum) hot strip mill project and a 6 mtpa pellet plant.
The company has spent half of capex (around INR 15,000 crores) out of growth capex of INR 31,000 crores. Out of the total capex, INR 2,500 crores is allocated under maintenance.
The company has capex allocation in range of INR 7,500-10,000 crores per annum. All the projects are progressing well on track and there are no hinderances, BigMint learnt from company’s investors call.
Highlights:
Steel production flat y-o-y: The company’s steel production remained largely flat y-o-y at 7.92 mnt in FY24 against 7.89 mnt in the previous year. In Q4FY24, production volumes edged upwards by 1% to 2.05 mnt from 2.02 mnt in Q4FY23.
Steel sales stable y-o-y: JSP reported sales of 7.67 mnt in FY24 as compared with 7.68 mnt in FY23. In Q4FY24 sales volumes edged down 1% to 2.01 mnt against 2.03 mnt in Q4 of last year. While the same rose 11% q-o-q against 1.81 mnt in Q3FY24 driven by growth in exports. The share of exports was 11% in Q4. In addition, the share of value-added sales rose 1% y-o-y to 64% in FY24.
The inventories of raw material (coal) and steel have witnessed an increase during the quarter, as per company sources.
EBITDA rises y-o-y: The company’s operating Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) rose 5% on the year to INR 10,231 crores in FY24 against INR 9,700 crores in FY23. In Q4FY24, the same increased 12% y-o-y to INR 2,512 crores from INR 2,240 crores in Q4FY23.
Net sales realisations: The net sales realisation (NSR) of steel was down by 5% on the quarter. Realisations are lower in both domestic and exports markets. The company will focus on value addition of products like converting large part of semi finished steel through hot-strip mill (HSM). Further, there shall be slight uptick in realisations by 1% in Q1FY25 as steel prices have increased by INR 1,000/t ($12/t) in April and further increase is expected in May.
Coking coal prices to drop in Q1FY25: Coking coal prices rose by $21/t for the quarter offset by higher efficiency in operations. Furthermore, prices are expected to be lower by $30-40/t on consumption basis in Q1FY25.