Jindal Steel & Power Limited Q1 FY23 Earnings Conference Call Insights

Key highlights from Jindal Steel & Power Limited (JINDALSTEL) Q1 FY23 Earnings Concall

Q&A Highlights:

• Amit Dixit from Edelweiss asked about the maintenance plans at Angul and Raigarh and if any intermittent shutdown can be seen at the DRI plant. V. R. Sharma MD replied the company is not taking any long maintenance shut down. However, JINDALSTEL is going for the intermittent shutdowns whenever required. There is no intention to reduce production.

• Sumangal Nevatia from Kotak Securities asked about the net debt movement during 1Q23. V. R. Sharma MD replied the net debt for 1Q23 was INR7,413 crore. JINDALSTEL had a structured long-term repayment of around INR400 crores and rest is the reduction in short-term debt.

• Rahul Jain from Systematix asked about raw material, how well the company is integrated on the coking coal requirement now and for next 1-2 years. V. R. Sharma MD said the company is comfortable on the RM side and is not foreseeing any problem.

• Rahul Jain from Systematix also enquired if the export share of total sales will remain high in the high 20s or if it will come down. V. R. Sharma MD clarified that the company will maintain its share of more than 20% of exports out of the production.

• Pallav Agarwal from Antique Stock Broking asked about actual quantum of price hikes taken in rebars. V. R. Sharma MD answered that primary steel mills have not increased the prices. However, price hike is seen in secondary steel due to scrap prices moving from $380 C&F to $460-470 C&F in India and many sponge iron plants were closed due to shortage of coal.

• Rajesh Mazumdar with B&K Securities asked about the time period for the current inventory situation in the system to normalize assuming export taxes exist for some more time. V. R. Sharma MD replied the company doesn’t manufacture anything to keep the inventory and don’t produce anything than the rebars. JSPL will maintain the volume number of 2 million ton per quarter.

• Indrajit Agarwal of CLSA asked about the capex intensity or project timeline. V. R. Sharma MD replied that there is no shortage of funds and capex will be as it is. So all the provisions, consent to operate, construction, everything is in place. The aim it not to spend more than INR6,000-7,000 crore per year.

• Indrajit Agarwal of CLSA also enquired about raising INR15,000 crore by way of debt from several banks and the use of it. Ramkumar R CFO said the amount is the approval given by the lenders and JINDALSTEL will be working only on online invest policy. Today the money is not needed, but whenever it’s needed the disbursement will be taken.

• Ashish Kejriwal from Centrum asked when the company can expect production from coal blocks coming in and in FY23 how much captive coal will be generated from company coal blocks. V. R. Sharma MD said that before March 31, 2023, JINDALSTEL will be in a position to open at least 1 mine (Utkal in Odisha) of the 4 mines. On the volume side, maybe about INR50-100 crore for first opening of the mine.

•  Vikash Singh from Phillip Capital asked if the company has taken any inventory write-down in 1Q23. V. R. Sharma MD replied that the company has not kept anything at hold and have paid about INR113 crore of export duty.