Domestic steel major JSW Steel's consolidated net profit jumped by 275 per cent to Rs 2,339 crore in the June quarter on strong demand and higher steel prices in the domestic market.
The company had clocked Rs 624 crore net profit during the same period last year.
"Following strong demand and rising international prices, the domestic steel prices also went up during the quarter. As a result, the company recorded revenue from operations of Rs 20,519 crore in Q1 FY19, registering a growth of 25 per cent," JSW Steel joint managing director Seshagiri Rao told reporters here.
The country witnessed a 9.2 per cent year-on-year growth in domestic steel demand for the first quarter led by robust government spend on infrastructure and strong consumer demand. Consequently, the company strategically increased domestic sales by 27 per cent YoY, which aided consolidated sales volumes increasing by 11 per cent to 3.76 million tonne.
The company's sales to the strategic automotive segment also increased by 57 per cent and sales of value added and special products rose by 6 per cent in the June quarter, Rao said, adding that the company's overseas subsidiaries also performed well.
Its net debt increased by Rs 1,070 crore during the June quarter due to a Rs 865 crore mark-to-market impact of rupee depreciation, Rao added.
The company said as part of backward integration, it has commenced operations of two iron ore mines and hopes to start operations in three more mines. It is awaiting for the auction of 'C' category mines in next six months period.
Commenting on its strategic acquisitions, Rao said, the resolution plan submitted by the consortium of JSW Steel and Aion Investments for acquisition of Monnet Ispat has been approved by the National Company Law Tribunal (NCLT) with certain modifications and the written order is still awaited.
The company completed the acquisition of 100 per cent stake in Acero Junction Holdings at Ohio in the US. The work to commence production is underway and the company plans to start operations by October, Rao said.
JSW Steel through its wholly owned subsidiary in Italy, JSW Steel Italy, today also completed the acquisition of 100 per cent stake each of Aferpi S.p.A and Piombino Logistics S.p.A and 69.27 per cent stake of GSI Lucchini.
Commenting on outlook, Rao said that the escalating trade tensions pose risks in the growth outlook.
The domestic steel demand in the June quarter grew at a healthy rate of 9.2 per cent, however, imports surged by 15 per cent, according to him.
Rao said the steel industry is concerned over rising imports and falling exports.
"Post the imposition of Section 232 in the US and suo moto safeguard measures announces by the EU, we have started witnessing diversion of steel imports from surplus countries into India," Rao said, adding that the government needs to impose trade remedial measures in a timely manner.
The company's stock ended 0.52 per cent lower at Rs 316.65 apiece on the BSE today, against 0.09 per cent increase in the benchmark.