India's Jindal Steel posts Q3 profit drop as export tax bites
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India's Jindal Steel and Power Ltd reported a nearly 68% fall in third-quarter profit on Tuesday, hurt by the government's levy on exports and weak global demand.
The company's consolidated net profit from continuing operations fell to 5.19 billion rupees ($63.26 million) in the three months ended Dec 31.
India's steel industry, already grappling with a slump in prices, has been reeling since the government introduced an export tax on certain steel intermediaries in May.
While the tax was withdrawn in November, it had more than halved the export volume, leading to companies losing share in key international markets, including Europe.
The contribution of Jindal Steel's exports to its sales on a standalone basis fell to 5% in the quarter from 23% a year ago.
Exports fell due to weak global demand and the continuation of export duty till mid-November, the company said in a statement.
Total revenue from operations fell marginally to 124.52 billion rupees from 125.25 billion rupees a year earlier.
"A much-awaited pickup in construction demand started towards the end of the quarter, leading to improvement in steel prices," the company said.
The company's shares rose 1.5% ahead of the results.
They have risen 0.5% so far this year, following a near 54% increase in 2022 vs a 21.8% gain in the Nifty metal index.
