Jindal Stainless reported a 28% drop in quarterly net profit on Monday as steel exports continued to grow, driven by a recently withdrawn government tax.
The stainless steel producer's consolidated net profit decreased to Rs 314 ($38.58 million) in the third quarter ended December 31 from Rs 435 ($38.58 million) a year earlier.
However, the New Delhi-based company's revenue from operations increased by 12% to Rs 6,350 from Rs 5,670 a year earlier.
Following the Indian government's decision to impose export duties on certain steel intermediaries in May, exports, which contributed 26% to Jindal's sales volumes in the previous period, decreased to about 5% this quarter.
Although the tax was withdrawn in November, the decision cut India's finished steel exports by more than half in the first nine months of the fiscal year, which began in April 2022, and received complaints from mills about loss of share in key markets, including Europe.
Competitor JSW Steel also saw a decline in quarterly profit. Steel Corporation of India, Tata Steel, Hindalco Industries, NMDC has yet to report results.
Jindal Stainless also highlighted the dumping problem of Chinese and Indonesian producers to the domestic market, reiterating the concerns of JSW Steel, which blames Chinese and Russian firms.
To boost exports, India has included iron and steel in an export promotion plan and said it will ask the EU to ease steel import quotas and tariffs.
Having an annual melting capacity of 1.9 million tons (MT) until March 2022, Jindal Stainless aims to increase its capacity to 2.9 mt by the end of Fiscal year 2023.
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