JSW Steel Q1 profit disappoints, shares decline
JSW Steel, India's No. 3 steelmaker, posted a quarterly profit that was half of what analysts had expected due to a foreign exchange loss and higher raw material costs sending its shares down by the most in over two months.business Updated: Jul 26, 2012 16:37 IST
JSW Steel, India's No. 3 steelmaker, posted a quarterly profit that was half of what analysts had expected due to a foreign exchange loss and higher raw material costs sending its shares down by the most in over two months.
JSW Steel, in which Japanese steelmaker JFE Holdings owns a 15% stake, reported a net profit drop of 53.5% to Rs. 2.7 billion ($48 million) for the fiscal first quarter ended June compared with a year earlier.
That missed the Rs. 4.94 billion expected by brokerages in a Reuters poll. The steelmaker booked a Rs. 5.9 billion foreign exchange loss due to a weak rupee JSW Steel said.
Indian steel demand has been growing at near double-digits over the past few years, pushing local firms to boost capacity and drawing global steelmakers including ArcelorMittal and Posco to set up base in the country.
But consumption has waned in recent quarters as Asia s third-largest economy slows.Shares in JSW Steel fell as much as 5.6%, the most since May 16, while the broader Mumbai marked slipped 1.13%.
Globally, steelmakers are struggling with the debt crisis in Europe, weak growth in Japan and a slower pace of expansion in China, the world s largest producer and consumer.
ArcelorMittal, the world's largest steelmaker, said this week it expects European steel demand will fall between 3 and 5% this year.
JFE reported on Thursday a 61% slump in its April-to-June profit compared with a year earlier missing estimates.