By Manvi Pant
(Reuters) -India’s JSW Steel reported a bigger-than-expected slide in second-quarter profit on Friday hurt by weak domestic prices and muted demand and cut its capex spending for the current fiscal year.
The country’s biggest steelmaker by market cap reported a six-fold decline in profit to 4.39 billion rupees ($52.23 million) for the quarter ended June 30.
Analysts, on average, had expected profit to decline 78%, as per LSEG data.
Steelmakers in India have been battling an influx of cheap imports, mostly from China, followed by South Korea and Vietnam, denting local prices.
This has led the steel ministry to back a temporary “safeguard duty” to help curb Chinese imports. An investigation has also been initiated on certain products imported from Vietnam to analyse their impact on domestic industry.
Domestic steel prices dropped to an over three-year low in the quarter, as per data from commodities consultancy BigMint.
JSW Steel now sees its capex spending for the fiscal year 2025 at 160 billion rupees-170 billion rupees, lower than the 200 billion rupees forecast earlier. The cut is due to the transfer of a project to port operator JSW Infrastructure and re-scheduling of an expansion project, the company said.
Steel demand in the July-September period also remained lackluster as higher-than-normal rainfall in the country slowed activity in the infrastructure and auto sectors – key clients for steelmakers.
Revenue from operations fell 11% to 396.84 billion rupees, which also fell short of analysts’ average estimate of 423.26 billion rupees.
However, its earnings before interest, taxes, depreciation and amortization (EBITDA) beat analysts’ view helped by a dip in total expenses, said Parthiv Jhonsa lead analyst for metal and mining at Anand Rathi.
EBITDA for the quarter stood at 54.37 billion rupees, higher than analysts’ expectation of 50.81 billion rupees. Total expenses dropped 5.3% to 386.44 billion rupees.
JSW Steel’s shares ended the session down 1.5%.
(Reporting by Manvi Pant in Bengaluru; Editing by Eileen Soreng)
