BENGALURU, Aug 11 (Reuters): India's Jindal Steel and Power reported a 15 per cent drop in first-quarter profit on Friday, hurt by the rise in expenses and fall in steel prices.
The New Delhi-based company's consolidated profit after tax fell to 16.92 billion rupees ($204.31 million) in the three months ended June 30 from 19.90 billion rupees a year earlier.
While domestic demand has been rising for Indian metals companies, subdued demand from top consumer China remained a drag on prices, analysts said.
Jindal Steel, which has an annual crude steel production capacity of 9.6 million metric tons per annum, said overall sales grew 6 per cent year-on-year. The share of exports stood at 10 per cent.
India's steel industry, grappling with a slump in prices, was further hit when an export tax on certain steel intermediaries in May last year. The tax was withdrawn later in November.
However, the export duty resulted in a 55 per cent fall in India's steel exports in fiscal 2023, the company said.
Gross revenue dropped 1.5 per cent to 145.39 billion rupees, down for the fourth straight quarter, while total expenses rose nearly 3 per cent.
As part of plans to reduce reliance on third-party suppliers, Jindal Steel said it has secured three new non-coking coal mines in FY 2022-23, which will likely commence operations in FY 2023-24.
It further said domestic demand for steel is expected to witness an annual expansion of 8-9 MT in the next two financial years.
Bigger rivals, JSW Steel's first-quarter profit nearly tripled on higher sales, while Tata Steel posted a 92 per cent slump in profit, hurt by the lower prices of alloy and expenses related to a pension scheme in Britain.
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