JSW Steel profit would have been much higher had the production not been cut due to severe iron ore shortage
JSW Steel Ltd reported net profit of Rs127.12 crore for second quarter FY12, on stand alone basis. The profit would have been much higher had the production not cut due to severe iron ore shortage and also the forex translation losses of Rs512.98 crore due to adverse movement in rupee dollar parity.
During the current quarter, the company achieved production of crude steel of 1.738 million tonnes. Production volume grew by 11% in crude steel, 2% in rolled flat products and 30% in rolled long products relative to that of corresponding quarter of the previous year. The company’s production was lower at least by 450,000 tonnes due to acute shortage of iron ore and higher procurement cost of iron ore also increased the cost of production of steel by about Rs1,500 per tonne during the quarter.
The company achieved quarterly sales volume of 1.882 million tonnes, 19% growth in sales volume and 33% in net sales value, compared to that of corresponding quarter of the previous year.
The turnover and net sales for the quarter stood at Rs8,242.55 crore and Rs7,625.06 crore respectively, showing a growth of 33% over the corresponding quarter of the previous year, mainly due to higher volume and improved sales realization. The EBIDTA for the quarter is Rs1,332.95 crore up by 15% over the corresponding quarter of the previous year. The company has posted a net profit after tax of Rs127.12 crore after considering foreign exchange translation losses.
Due to the unusual depreciation in the value of the rupee against US Dollar over the last three months, the net unrealized loss of Rs512.98 crore on restatement of foreign currency monetary items at close of the quarter has been considered by the company as an exceptional item.
The company’s net total debt gearing stood at 0.68 (as against 0.64, as on 30 June 2011) and the weighted average interest cost of debt is at 7.33% (vis-à-vis 7.81%, as on 30 June 2011).
JSW Steel closed at Rs580.45 per share on the Bombay Stock Exchange, 0.37% down from the previous close.
L&T revenues rose to Rs11,375 crore during the July-September quarter this fiscal over Rs9,504 crore in the year-ago period
Larsen and Toubro’s (L&T) has reported a 4.3% rise in net profit at Rs798 crore for the quarter ended 30 September 2011 against Rs765 crore in the same quarter last fiscal L&T revenues rose to Rs11,375 crore during the July-September quarter this fiscal over Rs9,504 crore in the year-ago period.
L&T bagged orders worth Rs16,096 crore during the quarter taking the total to Rs1,42,185 crore as on 30 September 2011.
“Despite the current slowdown in new investment decisions in many industries and uncertainty in global markets, the company succeeded in garnering orders against stiff competition, mainly from building and factories, hydrocarbon, minerals & metals and power transmission and distribution sectors,” the company said.
The current slowdown in investment momentum witnessed in almost all sectors of the economy is constraining the growth opportunities, L&T said. “Intensifying competition, high inflation, elevated interest rates, volatile financial markets and delayed policy intervention are posing considerable challenge for the decision makers,” it added.
L&T said that in the medium-term, it sees itself in a strong position to maintain revenue growth trajectory and stay prepared to benefit from opportunities when they materialise. In the late afternoon, L&T was trading at around Rs1330.10 per share on the Bombay Stock Exchange, 3.97% down from the previous close.
The demerged company with 80% of investor capital is awaiting listing approval since the past 10 months from BSE; bourse remains tight-lipped and refuses to hear small investors’ complaints
Market regulator Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange (BSE) seem to be least concerned about investors’ interest. Unreasonable delay in giving listing approval for a demerged company and ignoring investors’ complaints suggest that the regulator—and the bourse—both are adopting a hands-off approach. The question is—with whom does the buck stop?
Take the case of Five X Finance and Investment Ltd, a demerged arm of Octant Industries, which is yet to be listed after 10 months, holding up money of retail investors. Moneylife has reported on this issue (See: Five X, a demerged arm of Octant Industries, leaves investors in limbo ). A whopping 80% of investor capital is stuck in this unlisted company. Both the stock exchange and the company are not listening to the voice of the investors.
Octant Interactive Technologies Ltd demerged its financial division business and vested in Five X Finance and Investment Ltd, with 80% of its capital as per the
demerger agreement, on 7 December 2010. However, the company has still not received approval from the BSE.
After eight months, market regulator SEBI had granted listing approval to the company. But this time, it is the BSE which is yet to give its nod. Meanwhile, investors have nowhere to go as BSE is ignoring their complaints; the company says it is still “awaiting approval” from the bourse.
“Though there is an investor grievance cell at BSE, it is of no use. Nobody picks up the phone and (BSE) never replies to emails. What is the use of an investor grievance cell at BSE?” says an investor on Moneylife’s website.
Ninad Avasare, who had invested in Five X, said, “Does it really take so much time for getting permission for listing from the BSE? Or is the company deliberately causing this delay? Many gullible investors have been trapped by the company and they are eagerly waiting for their money.”
Interestingly, Octant Industries, which got only 20% capital, was successfully listed on 7 February 2011. We asked BSE for their stand, but it refused to comment. For clarifying matters, an e-mail query was send to SEBI too, but no answer has been received till the time of publishing this story. Meanwhile, the investors can only hope that some solution emerges in the near future.
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Post de-merger, Octant Interactive shareholders still await listing of spun-off business