JSW Steel has turned profitable in the quarter ended September 2014 and beat street expectations on all parameters. The company’s consolidated net profit stood at Rs 748.7 crore during the quarter as against loss of Rs 115.5crore in the year-ago period. Consolidated total income from operations grew by 7 percent to Rs 13,895 crore in July-September quarter compared to Rs 12,984 crore in same quarter last year, even operating profit jumped 18.9 percent on yearly basis to Rs 2,791 crore.
In an interview to CNBC-TV18, Seshagiri Rao, joint MD & Group CFO of JSW Steel, discusses the company’s earnings and its future plans.
Below is the transcript of Seshagiri Rao’s interview with Kritika Saxena on CNBC-TV18.
Q: Will you participate in e-auctions?
A: Any steel company is looking for backward integration as a long-term strategy. So JSW Steel - even though we expanded our capacities based on backward integration, which has been committed both in terms of iron ore and coal by various governments in India, we have invested a huge amount of money in the steel sector. So we are very anxiously looking for a transparent policy where the steel companies, which are doing value addition, creating employment and contributing taxes to the exchequer, they should get the iron ore mining concessions and the coal concessions. So if they are available in a transparent manner in e-auction, I think JSW Steel will definitely participate.
Q: What is the conversation that you have with the government with respect to the coal block e-auction or rather what are the demands that you have put forth specifically, any option from their side that they have given with respect to concessions?
A: JSW Steel has got some coal concessions but even though they have not reached a stage where it is in operations but we have invested money in the coal mining concessions, which have been allotted to JSW Steel and its associates and subsidiaries. So as a policy, we have been advocating right from beginning that the coal or iron ore or any natural resource should be allocated in a transparent manner as long as there is a discretion that is given either to the state government or the central government, the problem remains that the real user is not getting the mining concessions. Therefore, I think we welcome the step of the government of India to do the auction of the coal mining concessions in a transparent manner. I think JSW Steel will definitely participate in that.
Q: In the race for pretty much most of the attractive assets available internationally or domestically, break it up for me, there is the Italian plant that you are looking at, actively what are the plants that you are looking at so far, how much would you be open to spending for that?
A: Today, generally what is happening any acquisition which is there in the steel sector, JSW Steel name is attributed to that but we have been clarifying from time to time that JSW Steel strategy is to backward and forward integration and we continue to expand our capacities in India. First through Brownfield expansion and balance through either inorganic growth or through Greenfield expansions, so we are sticking to that. We have been continuously scanning various opportunities either forward or backward. Unless it is value accretive and it gives the long-term benefits to the company and the stakeholders, I don’t think we will go and do the acquisitions just like that. So we are very careful in acquisitions. Therefore I don’t want to comment any specific target right now. Once it matures to a stage where we can share, definitely we will share the information.
Q: This would be largely international that you are looking at or are there domestic assets that you are also exploring. If yes, what areas? If you could tell me the areas that you need to fit the company’s strategy?
A: Even in India or overseas, we are looking at backward and forward but India there are opportunities today because of the stress in the steel sector for inorganic growth, the way we have done Ispat industries and turned around and managed with JSW Steel today. So there are opportunities in India also in the steel sector. So we continue to evaluate those options but only one very important point as per inorganic growth in India is concerned, we are able to set up capacities at a very low specific investment cost per tonne. We can set up a million tonne capacity in the steel sector by investing only Rs 3,000 crore whereas today, the companies which have invested in the steel sector for creating capacity is close to Rs 6,000-7,000 crore or even Rs 8,000 crore. So that is too expensive for us to do any inorganic growth acquisitions.
Therefore it should be attractive and they should fit in our strategy then definitely we will continue to look at even in India the inorganic growth opportunities.
Source: moneycontrol.com
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
![Steel Insights](/assets/images/news/coal-insights.jpg)
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
![Steel Insights](/assets/images/news/ICMW_Jan09.gif)
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
![Steel Insights](/assets/images/news/ISMW.gif)
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
![Steel Insights](/assets/images/news/SteelInsights.jpg)
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.