Jindal Stainless Performance (Standalone) for the Quarter ended 31st December 2016

Posted by: at 2/07/2017 09:58:00 pm


Jindal Stainless Limited (JSL) Corporate Release

Performance (Standalone) for the Quarter ended 31st December 2016


Jindal Stainless Performance (Standalone) for the Quarter ended 31st December 2016
Key Highlights:  

Y-o-Y Comparison (Q3 2016-17 vs Q3 2015-16)
 a. Stainless Steel Sales Volume growth 25% b. Net Revenue growth 36% at Rs. 2,093 Cr. c. EBITDA growth 185%, at Rs. 341 Cr.  d. Net Profit at Rs. 40 Cr. against loss of Rs. 134 Cr.

Q-o-Q Comparison (Q3 2016-17 vs Q2 2016-17)
 a. Net Revenue growth 9% b. EBITDA growth 46%

* EBITDA = Earnings before Interest, Tax, Depreciation & Amortization and Other Income #EBITDA % is on total income from operations (net) @  including Job Work

Jindal Stainless Performance (Standalone) for the Quarter ended 31st December 2016


1. These results have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section  133 of the

Companies Act 2013 and other recognized accounting practices and policies to the extent applicable. Consequently, results for the quarter/ nine months ended 31st December 2015 have been restated to comply with Ind-AS to make them comparable.

2. EBITDA for the current quarter stands at Rs. 341 crore (excluding EBITDA pertaining to HSM Undertaking & Coke Oven Undertaking), showing an increase of 185% over the same period. The profit for the quarter ended 31st December 2016 includes stock gain of around Rs. 60 Crore as a result of substantial increase in prices of Ferro Chrome during the quarter. Additionally, the improvement in the EBITDA is outcome of the various steps taken by the company like change in the product mix, better operational efficiencies and improvement in yields.

3. The capacity utilisation of stainless steel operations at Jajpur (Odisha) was at 92% during the quarter ended 31st December 2016, as compared to 74% in the corresponding quarter of previous year. This persistent growth is on account of consistent efforts in optimization of operations.

4. A Composite Scheme of Arrangement (the ‘Scheme’) amongst Jindal Stainless Limited (the Company/Transferor Company) and Jindal Stainless (Hisar) limited (JSHL), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) under the provision of Sec 391-394 of the Companies Act, 1956 and other applicable provisions of Companies Act, 1956 and/ or Companies Act, 2013 was sanctioned by the Hon’ble High Court of Punjab & Haryana, Chandigarh (High Court) pursuant to its Order dated 21st September 2015 (as modified on 12th October 2015).

Section I and Section II of the Scheme became effective on 1st November 2015, operative from the ‘Appointed Date 1’ (specified in the scheme for section I and II) i.e. close of business hours before midnight of 31st March 2014 [the scheme effect was given to in the revised financial statements for the year ended 31st March 2015].

Section III and Section IV of the Scheme became effective on 24th September 2016 [i.e. on receipt of approvals from the Orissa Industrial Infrastructure Development Corporation (OIIDCO) for the transfer/grant of the right to use in the land on which Hot Strip Plant & Coke Oven Plant are located  to JUSL & JCL respectively as specified in the Scheme] operative from the ‘Appointed Date 2’ specified in the scheme for section III and IV i.e. close of business hours before midnight of 31st  March 2015 [the effect of same has been given in the revised financial statements for the year ended 31st March 2016]. Accordingly, the revenue and expenditure in relation to these undertakings for the quarter and nine months ended 31st December 2016 have been excluded from these results and accounted for in JUSL & JCL.  

5. Subject to approval of shareholders in the EGM to be held on 11th February, 2017, the Company proposes to issue following shares / warrants on preferential basis;

a) 6,39,38,606 nos. of equity shares of Rs. 2 each at Rs. 39.10 (including premium of Rs. 37.10) per share and 16,49,44,334 nos. of optionally convertible redeemable
preference shares (OCRPS) of Rs. 2 each at Rs. 39.10 (including premium of Rs. 37.10) per share on conversion of Fund Interest Term Loan (FITL) of Rs. 250 crore and Rs. 644.93 crore respectively.

b) 1,91,81,586 nos. of Warrants (CCW) of Rs. 2 each at Rs. 39.10 per CCW (including premium of Rs. 37.10) per CCW to a promoter group entity and each warrant is eligible for equal nos. of equity shares.

The proposed conversion of FITL as mentioned in 5(a) above will strengthen the cash flows of the Company.

Outlook: 

Economic activity is expected to rebound as business sentiments appear to be on revival path. International Monetary Fund (IMF) estimates global economic growth to accelerate in 2017-18. IMF projects moderate recovery for the world economy primarily on the growth projections in both emerging markets and developing economies. However, concern for the global economy may prevail, given the unpredictability in policy stance by the new US government.      

The global stainless steel melt shop production rose to 45.71 Million Tonnes in 2016 registering a surge of 8.30% from 2015. Encouraging global economic indicators show stainless steel demand to pick up and is expected to increase by 4.16% in 2017, as per Steel & Metals Market Research (SMR).  

Indian economy would continue to grow at a pace of over 7% that would drive the demand for stainless steel in India. Augmented expenditure proposed for the year 2017 on infrastructure sector by the government will be the key driver of stainless steel demand including railways.  
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