(Reuters) -India’s Jindal Steel and Power reported a surprise loss in the fourth quarter on Wednesday, due to one-off impairment charges related to its Australia and Madagascar assets, and weak steel prices.
The company reported a consolidated net loss of 3.39 billion rupees ($40.09 million), compared to a profit of 9.35 billion rupees last year. Analysts, on average, had expected a profit of 10.5 billion rupees, according to data compiled by LSEG.
The steelmaker incurred one-off expenses of 12.29 billion rupees due to impairment provisions related to its mining assets in Australia and Madagascar.
Total revenue from operations fell 2.3% to 131.83 billion rupees on weak steel prices. Expenses dropped 3.3% to 119.45 billion rupees, due to lower cost of raw materials.
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KEY CONTEXT
Analysts had expected Jindal Steel’s quarterly volume to contract by 2%-5% due to capacity constraints, mainly underutilization at key facilities and ongoing expansion projects.
More broadly, domestic steel mills have been struggling with a surge in cheap steel imports. India, the world’s second-biggest crude steel producer, was a net importer of finished steel for a second straight year in 2024/25, with nearly 80% coming from China, South Korea and Japan. Imports rose 14.6% last financial year.
However, on April 21, the government imposed a temporary 12% tax, known locally as a safeguard duty, on some steel products to protect local producers from a surge in cheap imports, chiefly from China.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth growth rating* analysts price yield
(%) (%) target** (%)
Jindal Steel 13.42 7.59 20.65 54.84 Buy 29 0.93 0.22
JSW Steel 19.61 9.70 14.51 178.99 Hold 32 1.03 0.71
Tata Steel 13.83 7.43 8.99 257.28 Buy 30 0.92 2.59
Steel Authority of 15.30 7.50 8.16 54.12 Sell 10 1.08 1.74
India
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JANUARY-MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.5590 Indian rupees
(Reporting by Anuran Sadhu in Bengaluru; Editing by Savio D’Souza and Leroy Leo)
