In April-June, general elections, which lasted for nearly half
quarter, led to muted steel demand, analysts said, which was compounded by
higher costs of rebar, a key raw material for steelmakers
Jindal Steel
and Power reported a drop in first-quarter profit on Wednesday as a string of
higher expenses added to the dent caused by weak steel demand in a quarter that
included the general elections.
The
steelmaker's consolidated profit after tax fell 21 per cent to Rs 1,338 cr
(around $160 mn) in the April-June quarter. Raw material costs surged 22 per cent,
leading to a 8 per cent rise in expenses at Rs 11,793 cr, the company said.
Jindal Steel's
coal mines have helped it offset rising iron ore costs for the past few
quarters, while its results also got a lift from buoyant steel demand due to
the government's sustained spending on manufacturing and infrastructure ahead
of the general elections.
In April-June however, the general elections, which lasted for nearly half the
quarter, led to muted steel demand, analysts said, which was compounded by
higher costs of rebar, a key raw material for steelmakers.
Last week,
bigger peer JSW Steel reported a bigger-than-expected fall in profit.