Hit hard by the rise in finance costs and rupee depreciation, Jindal Steel (JSL)) net loss has widened to Rs 412 crore during the second quarter ended September 30, 2013.
The company had reported a net loss of Rs 152 crore in the corresponding quarter of the previous fiscal.
In a statement, the company also said that its present Chairperson Savitri Jindal has resigned from the Board from today and has become Chairperson Emeritus. Accordingly, her son and company's Vice Chairman and MD Ratan Jindal has taken over as Chairman of Jindal Stainless.
"She has resigned from the board, with effect from October 28, 2013, but, shall continue to extend her guidance as an Emeritus Group Chairperson," JSL Chairman Ratan Jindal said, adding that she took the decision to devote more time to social work and on upcoming general elections.
During the September 2013 quarter, total income of JSL rose by 23 per cent to Rs 3,039 crore vis-a-vis Rs 2,464 crore of Q2FY'13, the company said. It primarily benefited from 24 per cent growth in export of its products to Rs 889 crore.
Commenting on the results, company's Executive Director (Finance) Jitender Pal Verma said that JSL's interest cost for the quarter rose by nearly 18 per cent to Rs 296 crore "on account of conversion of certain foreign currency loans into rupee loans and higher utilisation of working capital facilities".
The company also incurred an exceptional loss of Rs 223 crore during the quarter against an exceptional gain of Rs 68 crore in the corresponding period due to sudden depreciation of rupee against major currencies, which has resulted in net loss of Rs 412 crore, he said.
However, Jindal Stainless has started making operating profit, which stood at Rs 246 crore and was an increase of 110 per cent from the levels of Q2FY'13, he said.
"EBITDA (operating profit) for the second quarter ended September 30, 2013, was at Rs 246 crore which is 110 per cent higher than the previous year corresponding period figure of Rs 117 crore," Verma said.
Giving its outlook, the company said that due to continuing high inflation, large fiscal and current account deficits and a volatile currency, domestic stainless steel industry has been fighting hard to stay afloat.
Besides, a recent government decision to hike basic customs duty on import of steel scrap has placed domestic players at a huge competitive disadvantage vis-a-vis other countries, the company. It added that due to all of these, margins are under pressure and capacity utilisation is lower.
"In spite of various odds, stainless steel industry can be expected to grow at around 8-9 per cent provided the government is able to correct the unfavourable duty structure," JSL's Head Corporate Affairs Rohit Raina said.
Shares of the company fell by 1.70 per cent to close at Rs 37.50 apiece on the BSE today.