Jindal Stainless (Hisar) Limited Q3 FY23 Earnings Conference Call Summary
Conference Call Overview
• Date: January 24, 2023
• Key Participants:
• Abhyuday Jindal (Managing Director)
• Anurag Mantri (Group CFO)
• Focus: Discussion on Q3 FY23 earnings and market conditions.
Market Conditions
• Challenging global stainless steel market due to macroeconomic factors.
• Strong domestic demand with 95% of sales to local customers.
• Positive growth in key segments: railways, pipes, and automotive.
• Government policy changes, including removal of export duties, support growth.
Financial Performance
• Q3 FY23 Revenue: Rs. 9,073 crores (2% YoY increase).
• EBITDA: Up 37%, PAT: Up 58%.
• Nine-month revenue: 13% YoY increase.
• Net debt decreased by 40% since March 2020.
Strategic Initiatives
• Acquisition of Rathi Super Steel Limited to enhance product offerings.
• Plans for a stainless-steel industrial park in Jajpur.
• Investment in renewable energy projects for sustainability.
Production and Capacity
• Projected export volumes: 20,000 to 25,000 tons/month post-export duty removal.
• Current production capacity: 3 million tons, with no immediate plans to expand.
• Rathi Steel operations: 162,000 tons capacity with a five-year payback period.
Renewable Energy Investment
• Investment of less than Rs. 150 crores for a 26% stake in a 300 MW project.
• Completion timeline: 16 to 18 months.
Subsidiary Performance
• Subsidiaries facing losses due to global market conditions, particularly in Europe and Indonesia.
• JUSL merger expected to complete by March, benefiting from a low tax period.
Future Outlook
• No new projects planned in the next two years; focus on optimizing current operations.
• Interest in potential inorganic growth opportunities in stainless steel and mining sectors.
Sales Volume Breakdown
• 200 series: 35-40%
• 300 series: 40%
• 400 series: 20-25%
• Exports constituted around 4% of JSL's revenue for the quarter.
Conclusion
• Emphasis on adaptive business strategy and maintaining prudent debt ratios despite expansion efforts.