JSW Steel Q2 Results reported a dramatic 85% drop in consolidated net profit for Q2, amounting to Rs 404 crore, compared to Rs 2,773 crore in the same period last year. This significant decline is attributed to the influx of cheap imported steel, which pressured domestic prices to three-year lows.
The company also faced revenue challenges in Q2, with a decline of 11% bringing it down to Rs 39,684 crore. This revenue drop is directly linked to the adverse impacts of increased steel imports which have negatively affected market prices.
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An exceptional charge of Rs 342 crore was recognized this quarter, related to the surrender of an iron ore mine in Keonjhar, Odisha. This one-time expense significantly impacted the net profit figures for the quarter.
EBITDA margins also reflected the challenging environment, registering at 13.7%, a decrease from 17.7% in the corresponding quarter a year ago, and slightly higher than the 12.8% in the preceding quarter.
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The September quarter typically sees a slowdown in the steel industry due to the monsoon season affecting construction activities. However, this year, the impact was compounded by a surge in cheaper steel imports, particularly from China.
Despite current challenges, steel companies anticipate potential relief from the impact of cheap imports as China implements new economic stimulus measures, which may reduce the volume of steel flooding global markets.
