JSW Steel and Ambuja Cements results: Volumes and revenues flatter
Two commodity companies; Ambuja Cements and JSW Steel announced their quarterly results on 23 July. Both had a similar story of strong volume growth and better pricing.
JSW Steel reported 145.31% YoY growth in sales at Rs.28,902cr. Strong growth in steel exports compensated for local pressures due to COVID 2.0. Net profits for Jun-21 quarter stood at Rs5,904cr on volume growth and pricing power compared to net loss of Rs-561cr in the Jun-20 quarter. JSW Steel earned Rs.323 crore from share of profits in Bhushan Steel.
Read: Steel in Demand
JSW Steel reported record crude steel production of 4.10 million tonnes in Q1 with saleable steel of 3.61 million tonnes. Volumes were up 29% yoy with exports growing 14%. EBITDA margin for Jun-21 quarter was 35.5% while net margins were up 500 bps at 20.43%.
Ambuja Cements reported 50.26% yoy growth in sales at Rs.6,978 crore and has embarked on its ambitious 1.50 million tonnes (MT) capacity expansion at Ropar, Punjab. Net profits for Jun-21 quarter were up 91.78% yoy at Rs.877 crore. For Jun-21 quarter, cement sales volumes grew from 4.19 MT to 6.33 MT. The greenfield Mundwa Marwar plant will start production in Q3.
For the Q2 Jun-21 quarter, operating EBIT was up 78% with operating EBIT margins expanding 310 basis points to 24.8%. Ambuja Cements gained from higher volumes and cost efficiency gains. EBITDA margins for the Jun-21 quarter were up 90 basis points at 28.70%. Net margins at 12.56% compared favourably with 9.84% in the Jun-20 quarter and 12.28% in the sequential Mar-21 quarter.
Read: Cement Sector Updates
Overall, the story of JSW Steel and Ambuja Cements was a story of YoY growth in volumes and better pricing, although sequential pressure was visible due to COVID 2.0.
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