BENGALURU (Reuters) – India’s Jindal Stainless reported a 34.6% fall in fourth-quarter profit on Wednesday, as lower steel prices and weak international demand offset a surge in the domestic market.
The country’s biggest stainless steel maker by volumes posted a consolidated net profit of 5.01 billion rupees ($60 million) for the quarter ended March 31, down from 7.66 billion rupees a year earlier.
Despite robust demand for steel from the construction and automotive sectors of one of the world’s fastest-growing economies, manufacturers have been grappling with the impact of declining steel prices.
Jindal, which supplies the transportation and construction sectors, said its revenue from operations fell 3.2% to 94.54 billion rupees for the quarter.
While sales volumes for the quarter grew 12% year-on-year, backed by strong domestic demand, “key export markets, such as Europe and the U.S., remained weak,” the company said in a statement.
A dip in iron ore prices, the main component for making stainless steel, contributed to an 18.4% easing off of the company’s input cost. However, a negative inventory valuation due to falling nickel prices and higher freight costs kept the company’s total expenses nearly flat compared to a year earlier.
“The Red Sea crisis during the quarter…led to a steep increase in ocean freight and constrained availability of containers, consequently compressing margins,” the company said.
The crisis also led to the loss of some customers for the company due to delays in shipping, managing director Abhyuday Jindal said in a post-results news conference.
The New Delhi, India-headquartered company said it had seen a revival in some product categories in Europe, but the U.S. market was yet to show recovery. The company is also looking to expand its footprint in South America and the Middle East.
The stainless steel producer was also in talks with the Indian government over dumping of Chinese stainless steel into the country, Jindal said.
The board of Jindal Stainless recommended a dividend of two rupees per share for the 2023/24 financial year.
Shares of the stainless steel maker closed 4% lower ahead of the results.
($1 = 83.4710 Indian rupees)
(Reporting by Anuran Sadhu in Bengaluru and Neha Arora in New Delhi; Editing by Tasim Zahid)
