Jindal Steel Q3 net profit falls almost 80% on higher costs; revenue up 11%

India’s fourth-largest steelmaker Jindal Steel reported its third-quarter earnings after market hours on Friday, reporting a decline in profit in the December quarter due to weak steel prices, higher costs and a one-off loss due to labor law enforcement. Earlier, its shares closed 1.91% lower on the Bombay Stock Exchange, while the Sensex closed 0.36% lower.

The company, led by billionaire Naveen Jindal, reported an almost 80% drop in net profit attributable to owners. ₹between 190 crore and ₹951 crore in the same quarter last year, according to the company’s stock exchange filings. Profit was well below expectations ₹The average estimate from a Bloomberg survey of 11 analysts is ₹526 crore.

Quarterly revenue up 10.9% ₹13,026 crore to – ₹11,751 crore in the same quarter last year. The increase in revenue was driven by increased steel production and higher sales volume; however, these benefits were offset by lower steel prices.

The steelmaker’s consolidated crude steel production increased by 25% to 2.51 million tons compared to the September quarter, while sales volumes increased by 22% to 2.28 million tons. EBITDA fell by 25 percent ₹1,634 crore ₹2,184 crore in the same quarter last year due to high input costs.

Suman Kumar, vice-president of metals and mining at brokerage firm Philip Capital, said: “The results clearly show the impact on Ebitda falling due to higher than expected raw material costs. Beyond this expense, profitability fell further due to increase in depreciation and interest expenses.”

“Weak steel prices in the quarter also hurt performance. While revenues were higher due to increased production and volumes, the benefit of higher volumes was more than offset by lower realizations.”

Net debt is increasing

Net debt increased ₹15,443 crore as of December 31 ₹14,156 crore at the end of September, mainly due to ongoing capital expenditure. The company suffered ₹₹ 2.076 billion capital expenditure was incurred in the quarter due to expansion projects at the Angul plant. The three million tonnes per annum basic oxygen furnace-III at Angul is on track to be commissioned in the fourth quarter of FY26, the steelmaker said. Once operational, the company’s steel production capacity will increase to 15.6 million tons annually.

Jindal Steel also acknowledged the acceptance of a one-time exceptional gratuity and compensation for absences from work. ₹55 crore during the quarter, it said, adding that it was in the process of assessing whether the new labor laws would have any further impact on employee benefits.

While steel prices used in automobiles and household appliances fell to a nine-month low in November, steel used in construction and infrastructure was the cheapest in nearly five years due to oversupply and weak demand in major infrastructure projects. Mint was reported last week. Demand decreased further after the temporary protection measure tax expired on November 7 and there was no clarity on whether it would be extended until the end of December.