Increased spending on infrastructure development holds promise for JSW Steel
01-Mar-2007 •Value Research
The demand for steel, the most widely used metal, is rising as ever. Government's thrust on infrastructure development is driving the demand for the commodity. In the next five years, the spend on infrastructure is expected to be over Rs 12 trillion (or Rs 12,00,000 crore)
India is one of the top steel producing markets due to its rich iron ore resources and its proximity to China, South Asia and the Middle East, which are key export markets for the company.
JSW Steel (Idirect Code: Jinvij) is one of the integrated steel producers (ISPs) of the country. Its wide range of products extend from pallets to coated steel. The company uses state-of-the-art COREX technology for manufacturing products. The company has a strong order book. Its downstream products constitute around a third of India's exports of galvanised products.
In the third quarter of the current financial year the company's net sales grew by 51 per cent to Rs 2,301.5 crore as against corresponding period last year. The company also reported a 82 per cent higher EBITDA to Rs 796.7 crore during the same period.
During the quarter, the company also successfully executed a 1.3-mtpa expansion project. The benefit from this project will start accruing from the next financial year. JSW Steel was able to report higher EBITDA due to the higher realisations from hot rolled coils, lower power consumption and reduction in fuel rates. The rise in zinc prices led the company to modify its galvanising lines, which now offer improved physical and mechanical properties.