InvestorQ : What explains the sharp spike in the profits of JSW Steel in the Dec-20 quarter?
prachi Patwardhan made post

What explains the sharp spike in the profits of JSW Steel in the Dec-20 quarter?

Answer
image
sara Kunju answered.
11 months ago
Follow

JSW Steel, part of the Jindal group, reported Q3 PAT up by a whopping 1327% at Rs.2,669 crore on a yoy basis on the back of a major revenue boost. Revenues were up 21.07% in Dec-20 quarter at Rs.21,859 crore on the back of volume growth of 5% in crude steel and saleable steel. Actually, it was the support from better prices as prices of steel and steel products were buoyant due to sharp revival in demand from India and China.

Operating profits were up 238% at Rs.4,716 crore for the Dec-20 quarter on the back of sharply higher revenues with almost flat operating cost structure as the fixed costs were better absorbed. OPM improved from 7.73% in the Dec-19 quarter to 21.57% in Dec-20 quarter, while the PAT margins expanded from 1.04% to 12.21% in the same period.

JSW recorded record quarterly EBITDA of Rs.5,496 crore in the Dec-20 quarter with profits and sales driven largely by traction from higher price realizations. JSW also reduced its net debt by nearly Rs.1100 crore as the net debt / equity ratio came down to 1.29X and the all important and revealing net debt / EBITDA ratio was down to 3.53X. Interestingly, capacity utilization went up sharply from 86% to 91% in the Dec-20 quarter.
1 Views