The Hindu : Business : JSW Steel net dips to Rs. 219 crore

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JSW Steel net dips to Rs. 219 crore

— PHOTO: PAUL NORONHA

PRICE MISMATCH: Sajjan Jindal (left), Vice-Chairman and Managing Director, JSW Steel, with Y. Siva Sagar Rao, Joint Managing Director and CEO, addressing a press conference in Mumbai on Thursday.

MUMBAI: The agreement between steel makers and the government for holding the price of the commodity has hit JSW Steel’s bottomline hard as its profits for the first quarter of the fiscal dipped 52 per cent to Rs. 219.35 crore over the same period last fiscal.

Taming inflation

“The biggest factor for the dip in net profit is the moratorium between steel makers and the government to tame inflation. The government did not allow us to pass on the cost push to the finished product. So, we could not match global prices,” JSW Steel Vice-Chairman and Managing Director Sajjan Jindal said here on Thursday.

Lending support to the government in its fight against the runaway inflation, domestic steel makers had on May 7 promised to hold prices for three months.

Net sales up 54 p.c.

Net sales of the company during the quarter, however, went up by 54 per cent to Rs. 3,671.49 crore from Rs. 2,385.44 crore in the year-ago periodfirst quarter of the previous fiscal.

“The gap between domestic and global steel prices is around $300 a tonne. This kind of price hike is not warranted, but certainly there will be some increase in steel prices from August 8,” Mr. Jindal said.

The government would appreciate the cost push and understand the situation this time, he hoped.

The depreciation of rupee against the dollar also impacted the company’s bottomline as the exchange difference amounted to Rs. 311.44-crore loss for the quarter as against Rs. 96.51-crore gain in the corresponding quarter of the previous fiscal. — PTI

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