Jindal Stainless Q3 Results: Net profit falls 28% on lower exports

Jindal Stainless reported a 28% drop in quarterly net profit on Monday, as steel exports continued to reel from the impact of a government levy that was withdrawn recently.

Consolidated net profit for the stainless steel maker fell to Rs 314 crore ($38.58 million) for the third quarter ended December 31 from Rs 435 crore a year earlier.

However, the New Delhi-based company's revenue from operations climbed 12% to Rs 6,350 crore from Rs 5,670 crore a year earlier.

Exports, which contributed 26% to Jindal's sale volumes in the year-earlier period, fell to nearly 5% this quarter following the Indian government's decision to introduce an export tax on certain steel intermediaries in May.

Although the tax was withdrawn in November, the move cut exports of India's finished steel by more than half during the first nine months of the fiscal year that began in April 2022 and drew complaints from mills about a loss of share in key markets, including Europe.

Rival JSW Steel also saw a fall in profit for the quarter. Steel Authority of India, Tata Steel, Hindalco Industries, NMDC are yet to report results.

Jindal Stainless also flagged the issue of dumping in the domestic market by Chinese and Indonesian manufacturers, echoing worries from JSW Steel, which has blamed Chinese and Russian firms.

To boost exports, India has included iron and steel in an export incentive scheme and will seek an easing of steel import quotas and tariffs from the EU.

Jindal Stainless, which had an annual melt capacity of 1.9 million tonnes (MT) till March 2022, aims to increase its capacity to 2.9 MT by the end of FY2023.

It has two stainless steel manufacturing complexes in India, one in the state of Haryana and the other in Odisha, and has a unit in Indonesia.