(Reuters) – India’s Jindal Stainless reported a drop in second-quarter profit on Thursday, as falling steel prices offset a drop in input costs.
The company’s consolidated profit after tax fell 20% to 6.09 billion rupees ($72.4 million) for the three months ended Sept. 30.
The stainless steel maker’s net revenue came in at 97.77 billion rupees, down marginally from 97.97 billion rupees a year earlier.
For further earnings highlights, (click here).
KEY CONTEXT
Steel prices in India plunged to their lowest in more than three years in August, as the country remained a net importer of the metal.
Higher imports have been a concern for Indian steel companies for the past few quarters. Steel Minister H.D. Kumaraswamy had told Reuters earlier this year that the country is currently in discussions to tackle the issue.
Meanwhile, costs of key raw materials, iron ore and coking coal, declined in the reported quarter, analysts said.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth growth rating* analyst price yield
s target** (%)
Jindal Stainless 15.86 10.09 6.12 28.39 Buy 7 0.88 0.39
Jindal Steel And 13.14 7.59 17.87 28.13 Buy 25 0.91 0.21
Power
Tata Steel 13.65 7.37 5.73 94.26 Hold 29 0.94 2.32
Steel Authority of 14.52 7.30 3.42 14.87 Sell 11 1.12 1.54
India
* The mean of analyst ratings standardised to a scale of “Strong Buy”, “Buy”, “Hold”, “Sell”, and “Strong Sell”
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.0280 Indian rupees
(Reporting by Manvi Pant in Bengaluru; Editing by Sumana Nandy)
