5 days ago
India's Jindal SAW posts third straight quarterly profit decline on lower demand
Aug 5 (Reuters) - India's Jindal SAW ( opens new tab, a manufacturer of steel pipes for the energy, transportation and water sectors, reported a decline in first-quarter profit on Tuesday, weighed down by lower domestic demand amid a slowdown in construction activity.
Consolidated net profit after tax dropped 3.9% to 4.24 billion rupees ($48.3 million) in the three-month period ended June 30.
Revenue from operations fell about 17.3% to 40.85 billion rupees.
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The April-June quarter witnessed weak demand for steel pipes as early onset of monsoon dampened construction activity, causing delays in various projects. India's industrial output during April-June grew marginally by 2%, compared with an increase of 5.4% last year.
Additionally, tighter money supply reduced liquidity for dealers and contractors, weakening their purchasing capacity, according to two analysts.
The company's iron and steel pipes sales dropped 19% year-on-year to 326,000 million tonnes in the quarter.
Its peer, APL Apollo Tubes reported a higher quarterly profit, but lowered its full-year volume growth outlook due to weak demand, early monsoon, and weak exports due to geopolitical tensions.
PEER COMPARISON
* 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
APRIL-JUNE STOCK PERFORMANCE
-- All data from LSEG IBES
-- $1 = 87.8100 Indian rupees
