Jindal Saw Profit Plunges 49% as Margins Squeeze

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AuthorAnanya Iyer|Published at:
Jindal Saw Profit Plunges 49% as Margins Squeeze
Overview

Jindal Saw Ltd. reported a steep 49% year-on-year decline in net profit to ₹258 crore for the December quarter. Revenue also slipped 6.2% to ₹4,943 crore, with EBITDA margins contracting significantly to 12.4% from 17.8%. The company faces a legal challenge involving a subsidiary's substantial arbitral award.

Jindal Saw Q3 Profit Slumps Nearly 50%

Jindal Saw Ltd. posted a significant 49% year-on-year drop in net profit for the third quarter ended December 31, 2024, reporting ₹258 crore compared to ₹506 crore in the prior-year period. The company's financial performance came under pressure across multiple metrics, reflecting challenging market conditions.

Revenue from operations saw a 6.2% decrease, falling to ₹4,943 crore from ₹5,271 crore year-on-year. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) declined 34.8% to ₹612.9 crore, indicating compressed profitability. The EBITDA margin contracted sharply to 12.4% from 17.8% in the corresponding quarter of the previous year.

Segment Performance

Jindal Saw operates with a single reportable business segment: Iron & Steel Products. Consequently, no segment-specific financial disclosures were provided.

Tax and Legal Matters

The company noted that its current tax expense for the nine months ended December 31, 2024, reflects a tax refund of ₹133.55 crore. This refund stems from additional claims for earlier years that were decided in Jindal Saw's favour by the appellate authority.

Separately, Jindal ITF Limited, a subsidiary, is engaged in a legal appeal before the Delhi High Court. This concerns a single-judge order that overturned an arbitral award of ₹1,891.08 crore plus interest and applicable taxes. Management, based on legal counsel, expressed confidence in a strong case and a favorable eventual outcome, stating no adjustments were made to consolidated results.

Market Reaction

Shares of Jindal Saw Ltd. reacted negatively to the results, closing down 3.64% at ₹154.14 on the National Stock Exchange (NSE) on Friday, January 16. The stock's performance reflected investor concerns over the profit decline and margin erosion.

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