Jindal Stainless - Good Quarter

Jindal Stainless Net Zooms 120.47% In Sep`06 Qtr

Jindal Stainless has posted a 120.47% rise in net profit after tax and exceptional items, to Rs 970.5 million for the quarter ended September 30, 2006 as compared with Rs 440.2 million for the quarter ended September 30, 2005. Total income increased by 41.25% to Rs 11,500.5 million for the quarter ended September 30, 2006 from Rs 8,142.1 million for the quarter ended September 30, 2005. Net sales increased by 41.37% to Rs 11,446.4 million for the quarter ended September 30, 2006 from Rs 8,096.4 million for the quarter ended September 30, 2005. EPS increased by 85.5% to Rs 7.42 for the quarter ended September 30, 2006 from Rs 4 for the quarter ended September 30, 2005.

Jindal Steel is reported to be close to buying out ThaiNox, Thailand`s largest stainless steel company, for USD 325 million.

Excerpts from CNBC – TV18’s exclusive interview with Ratan Jindal:

Q: Can you take us through your margin picture?

A: This quarter has been pretty good. we have increased turnover wise about little over 40% as compared to the same quarter last year. EBITDA margins are about 105-110% and profit after tax is almost about 120%.

Q: How realisations pan out for the quarter?

A: The turnover has gone up from Rs 1200 crore plus for this quarter compared to last year turnover of Rs 885-883 crore.

Q: How are you looking at steel prices at this juncture? Are you seeing them stable at current levels or do you think a slight slippage is likely towards the end of FY07?

A: Stainless steel is also being recognised by the Government of India as a separate entity and separate product. It has a strong market as stainless steel is actually replacing lot of competitive material like steel and plastics and few other material. I am seeing a very good growth going forward and stainless steel prices should also remain quite firm for next two-three quarters.

Q: Can you take us through your acquisition plans, we understand that you are planning to start operations in the form of subsidiaries in several European countries?

A: Yes, we have acquired an Indonesian company some time back and we have been able to run it at 100% capacity. We have decided to expand the capacity three times, over next one year itself.

Within Jindal Stainless we are expanding our value added products like cold rolling as well as our precision strips. Globally we are definitely looking for more similar acquisitions; wherever there is opportunity we are quite vigilant and alert and we hope to expand our network globally.

Q: Are your margins likely to fall because of the rising nickel prices?

A: We are world leaders in 200 series. There are three typical grades of stainless steel, 200, 300 and 400. There is a 400 series, which is without nickel and there is 200 series, which contains low nickel. So both these grades are growing at a much faster pace . We are the leaders in 200 series, and also making our presence felt in 400 series.

Q: What is your current order book stand at?

A: We are overbooked for a year actually and that is why we are increasing our melting, rolling and all the existing capacities at Hisar. We have increased by 15% this year and hopefully by next year it will be up by 20%. We are pretty full and that is why we are taking up the Orissa project, which is 1.6 million tonnes fully integrated stainless steel plant.