Jindal Stainless rallies 5 per cent on posting strong Q1 results; announces Rs 2,150 crore expansion plan
The estimated Capex of this brownfield expansion is Rs 2,150 crore. The three-pronged expansion plan envelopes the expansion of melting capacity and commensurate strengthening of forward as well as backward linkages.
In terms of consolidated performance, the company’s revenue stood at Rs 4,033 crore, up by 193 per cent on a YoY basis. EBITDA came in at Rs 601 crore, skyrocketing by more than 8 times as compared to the last year. Profit after tax for the quarter ended June 30, 2021, stood at Rs 306 crore. The low base effect helped register strong growth numbers.
The company accelerated its deleveraging strategy during the quarter and narrowed long-term external debt (excluding group company JSHL’s debt) by Rs 210 crore. As of June 30, 2021, net lenders’ debt (excluding group company JSHL’s debt) stood at Rs 1,445 crore. During Q1FY22, interest cost was reduced by 38 per cent over the corresponding period last year to Rs 81 crore.
The company’s board of directors approved a brown-field expansion plan for the company to leverage the available top-notch infrastructure in Jaipur.
The estimated Capex of this brownfield expansion is Rs 2,150 crore. The three-pronged expansion plan envelopes the expansion of melting capacity and commensurate strengthening of forward as well as backward linkages.
The company plans to double melting capacity from the existing 1.10 million tonnes per annum (MTPA) to 2.10 MTPA, at an estimated Capex of Rs 530 crore. The completion is estimated by Q3FY23.
JSL will also be commissioning combo lines to facilitate downstream expansion. To be precise, 1.5 times expansion of hot rolled annealed pickled (HRAP) capacity and 1.7 times expansion of cold rolled annealed pickled (CRAP) capacity. HRAP and CRAP capacities will be enhanced from the current 0.8 MTPA and 0.45 MTPA to 1.25 MTPA and 0.75 MTPA, respectively. The estimated Capex for this enterprise is Rs 1,250 crore while its completion is estimated by Q4FY23.
They will also plan to expand Ferrochrome capacity by 1.4 times, from 0.25 MTPA to 0.35 MTPA to scale up backward integration and cost efficiency at an estimated Capex of Rs 315 crore while the completion is estimated by Q3FY24.
The remainder of the Capex budget will be used for enhancing quality assurance for new generation grades in high-end segments, balancing of units, and other necessary improvement activities.
The share price of Jindal Stainless touched a high of Rs 160.95 on BSE during early market hours on July 27, 2021 (Tuesday).