Jindal Stainless posts modest gains amid global uncertainty, weakened exports

India’s largest stainless steel producer, Jindal Stainless Limited, reported its financial results for Q2 FY25, showcasing resilience amidst global market turmoil. Despite the complexities of the geopolitical environment and a slowdown in export demand, the company posted a 1.68% increase in standalone net revenue, reaching ₹9,746 crore. However, weak demand from export markets weighed on overall sales, with volumes dropping 2.34% quarter-on-quarter to 5,64,627 tonnes.

Domestic demand cushions export struggles

Jindal Stainless’ performance reflects a challenging global landscape, but domestic market stability provided a much-needed buffer. Managing Director Abhyuday Jindal highlighted that India’s growth story continues to drive the company forward, despite global uncertainties.

The quarter’s earnings before interest, taxes, depreciation, and amortization (EBITDA) increased slightly by 0.25% to ₹1,007 crore, demonstrating the company’s strong cost management and operational efficiency. Profit after tax (PAT) rose by 1.90%, reaching ₹589 crore.

Dumping threatens India’s steel industry

While domestic demand remained steady, particularly in sectors like pipes, tubes, and railway infrastructure, Jindal Stainless faced stiff competition from imported steel. Subsidised imports from China and Vietnam, which surged by 75% in H1 FY25 compared to H1 FY24, continue to disrupt the Indian market. Jindal Stainless, however, managed to increase its market share by leveraging competitive pricing and an efficient delivery cycle.

Mr. Jindal expressed frustration over the ongoing issue of imported subsidised steel, calling for stronger policy measures to create a level playing field for Indian manufacturers. Despite this, the company remains optimistic about the future, given the government’s renewed focus on stainless steel for critical infrastructure projects.

Exports stumble amidst global headwinds

Jindal Stainless struggled with its export market, which didn’t meet expectations due to geopolitical tensions and high freight costs. Exports to the European Union took a significant hit, with lower demand and high shipping expenses curbing growth. However, markets in the US, Middle East, and South Korea showed improvement.

Consolidated net revenue for the quarter grew by 3.68%, reaching ₹9,777 crore. EBITDA stood at ₹1,186 crore, but PAT dropped by 5.67% to ₹609 crore due to weaker export figures.

Sustainability and technological advancements

In a bid to remain competitive, Jindal Stainless made significant strides in sustainability and technological advancements. The company increased its use of renewable energy to 25%, significantly reducing emissions. Notably, the commissioning of its Nickel Pig Iron (NPI) facility in Indonesia, completed eight months ahead of schedule, marked a key milestone in its sustainability journey.

Moreover, the company’s focus on research and development saw it supply stainless steel for critical sectors such as defence and space, expanding its reach into niche markets. Jindal Stainless also supplied steel for the Vande Bharat sleeper coaches, reinforcing its role in India’s key infrastructure projects.

Expert outlook: India’s manufacturing sector still a growth engine

Analysts noted that Jindal Stainless continues to benefit from India’s robust manufacturing sector, particularly as infrastructure development drives domestic demand. However, concerns over the impact of dumping and the unpredictable export market remain critical challenges for the company moving forward.

Financial experts remarked that Jindal Stainless’ ability to maintain its market share despite challenges shows its resilience and potential for future growth, provided the government implements stronger deterrents against unfair trade practices.