The steel outlook is quite positive, said VR Sharma, MD of Jindal Steel and Power Ltd (JSPL), in an interview to CNBC-TV18.
The correction in long product prices happened last month for about Rs 2,000 per tonne and was regained by Rs 500-700 per tonne.
Assessing the steel demand, he said, “While the demand as well as prices are quite strong on flat products, some pressure can be seen on long products.”
In terms of private capex and government orders, he said, “80 percent demand is from government-related infra projects be it rails, roads, bridges, buildings, housing, water connectivity pipelines. These projects will take about 6-8 months.”
According to him, overall demand is going to be very bullish.
The company has given a volume target of 8.25 million tonne for FY22. “We will be crossing 8.25 million tonne. The flat products are doing extremely well. Hot-rolled coils as well as plates are doing extremely well. So in general, I would say that there will be a positive outlook on all,” he shared.
“Blended realisations came down to Rs 2,000 per tonne and regained Rs 1,000 per tonne, so there is a net redemption loss of Rs 1,000 per tonne over the month of June,” Sharma said.
Also Read: Auto demand patchy across segments, don’t expect huge discounts this festive season: CRISIL
“Whatever reduction in iron ore prices will take place will be passed on to customers,” he said.
While giving the guidance on EBITDA per tonne, he mentioned that the company will be in a position to maintain the EBITDA margin.
The company has announced a Jindal Power Ltd (JPL) deal, which will be unlocking value for shareholders. When asked when the deal will get completed, he said, “The statutory provisions are required from the Indian government and I think this may take three to four months - by the end of this calendar year, we are expecting that this deal will mature.”
For the full interview, what the accompanying video.