JSW Steel sees an opportunity as a market share shift takes place in the steel industry with the MSME and secondary producers not being able to ramp up in these challenging times.
In an interview with IANS, Seshagiri Rao, Joint Managing Director, JSW Steel and Group CFO, said the company has given a guidance for 16 million tons of steel production and 15 million tons of sales.
“Whatever we are down in quarter one, we will be able to make up in the remaining three quarters,” he said.
Rao added that JSW has a history of delivering 4 million tons every quarter, repeatedly quarter after quarter. “Notwithstanding slow recovery in domestic demand, we are geared to deliver what we committed in the guidance,” he said. He said April was a washout for the company due to the Covid-19 lockdown.
JSW Steel Ltd is the flagship company of the diversified $12 billion JSW Group which has a leading presence in sectors such as steel, energy, infrastructure, cement, sports, among others.
Rao said that demand has been recovering month after month and while in April, it was 9 per cent of normal, it went up to 35 per cent in May and 55 per cent in June. “There is a steady improvement in demand and gradual recovery in demand will happen. If there is a shortfall in domestic demand, then it will be exported.”
Flagging an important dynamic in steel production, he said that in the first quarter, crude steel production was down by 43 per cent but six major players delivered 74 per cent of production.
“MSMEs, secondary players, in these challenging times are not able to ramp up capacity like they used to,” he said. In the steel sector, 60 per cent production is with primary, or big, players, and 40 per cent is with secondary players.
However, now, 60 per cent of the players are producing 75 per cent of the steel. “So because of this change, there will be a shift in the market share of the industry. While some gradual recovery will happen, big players will take the market share. This is where the opportunity lies for JSW,” Rao said.
JSW will close the proposed acquisitions of Asian Colour and Bhushan Power and Steel in the current financial year, Rao said. In the case of BPSL, three litigations are in the Supreme Court, which are crucial for the company’s plan.
On the domestic steel demand trends, he said that forecasts for Indian steel demand vary from a fall of 8 per cent to 18 per cent, which is a very wide range.
“My view is a 9 per cent fall in steel demand. Last year, the demand was 100 million tons and this year, it will be 90-95 million tons. I don’t think a fall of 18-20 per cent will happen,” Rao said.
On the Covid-19 incident in the JSW site in Vijaynagar, Rao said the recovery rate is 80 per cent and other staff are also healthy and active. Around 700 cases were detected and the company took all preventive measures to ensure that the employees are safe and the
plant also functions normally.
The number of employees critical for operating the plant were moved to the township and the factory was sealed and that’s how the spread of the infection was controlled, he added.
JSW has forecast an improvement in overseas operations in US and Italy from the next quarter.
On the trend of Indian companies buying overseas assets, Rao said that whichever companies have ventured outside India, there are very few examples that are successful.
He added that given the trend happening globally of supply chain realignment, it will give a huge scope for a quantum jump of the Indian growth story. He said there is opportunity in India itself and a lot of groups will refocus on India.
Rao added that the JSW is working hard to deliver the guidance for the fiscal. It expects to become profitable in the next nine months. The target is to complete the balance projects and acquisitions.
“This year is a year of consolidation. We see a lot of hope next year. JSW will add capacity to 25 million tons next year from 18 million tons currently. Backward integration of iron ore is planned next year. Next year, we will see growth. There are a lot of positives in next nine months and (we are) getting ready for the growth next year,” Rao said.
The company reported crude steel production of 2.96 million tonnes, with average capacity utilisation of 66 per cent for the quarter – as compared to an average utilisation of 46 per cent for the Indian steel industry.
Godrej Properties logs Rs 20 crore consolidated net loss in Q1
Godrej. (Photo: twitter@GodrejGroup)
Godrej Properties on Wednesday reported a consolidated net loss of Rs 20.23 crore for the April-June quarter of FY 2020-21.
During the corresponding period of the last fiscal, the company had reported a consolidated net profit of Rs 89.87 crore.
The real estate major reported an 88.63 per cent fall in its revenues from operations during the first quarter of FY 2020-21 at Rs 72.29 crore.
In its investor presentation, the company said that due to the Covid-induced lockdown, there was very limited construction activity during the quarter and as a result, no new projects achieved revenue recognition. Cash collections, which depend on construction milestones, were also impacted, it added.
“This led to an accounting loss and negative operating cash flow for the quarter,” the company said.
Commenting on the performance, Pirojsha Godrej, Executive Chairman, Godrej Properties Ltd, said: “While we expect poor reported earnings and cash flows this financial year due to the lockdown and the major impact it has had on our annual construction plan, we expect strong momentum in both portfolio project additions and new project launches during the rest of the financial year.”
He added that that the current crisis will add further momentum to the process of consolidation that is underway in the sector and the company will continue to focus on rapidly growing its market share.
Shares of the company plunged nearly 3 per cent post the earnings announcement. Currently its shares on the BSE are trading at Rs 902.50, lower by Rs 28.70 or 3.08 per cent from its previous close.
Indian Railways changes freight policy to boost economy
With an aim to boost economic activities in the country during unlock 3.0, the Indian Railways is offering a slew of incentives, including 50 per cent concession in terminal access charges for covered wagons, to boost freight traffic.
A Railway Ministry spokesperson said that its new policy measures will further boost the incentives for all suppliers to transport their goods through railways.
In the revised policy, the Railways has worked on the alternate goods shed policy, under which terminal charge will not be levied on consignments booked from alternate goods sheds, instead of identified busy goods shed, the official said.
The railways has already surpassed the freight loading figures in August so far, adding that 8.64 million tonnes of freight had been loaded compared with 8.37 million tonnes during the corresponding period last year.
The official said that under the free-time relaxation for covered wagons, zonal railways are empowered to relax the free time up to double the normal free time and/or non-levy of demurrage/wharfage in case of covered stock up to September 30.
The official said that to boost the freight traffic, the railways has decided to give 50 per cent concession in terminal access charge on container traffic handled at Group-III Container Rail Terminals.
The Ministry has decided to not collect the stabling charges on container traffic from May 18 to October 31.
A discount of 5 per cent on haulage charge per 20-foot equivalent unit (TEU) is being given on loaded containers from August 4 to April 30, 2021, the official said.
The official said permission to accept road weighbridge weight figures to certain goods sheds of South Central Railway for loading granite-all documents and data to be captured in the system.
The railways has also decided to give a concession of 40 per cent for loading in open wagons covered with tarpaulin.
Maruti Suzuki launches new S-Cross Petrol
Automobile major Maruti Suzuki India on Wednesday launched the all new S-Cross Petrol with a starting price of Rs 8.39 lakh.
As per the company, the SUV has been engineered with a ‘1.5 Litre K series BS6’ petrol engine.
“The new refined engine delivers a peak power of ’77KW@6000 rpm’ with a top-end torque of ‘138Nm@4400rpm’ that de livers an energetic driving experience.”
“The engine offers superior NVH characteristics powered by a pendulum mount engine, offering unmatched best in-class fuel efficiency (18.55km/l) and an improved cooling performance.”
According to the company, the new S-Cross Petrol is available with 5-speed m anual and 4-speed automatic transmission.
“Automatic variants are equipped with hill hold assist feature, as standard. These help enhance the driving experience through optimal acceleration and performance,” the statement said.
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