“We expect that the gross sales will be lower” this fiscal year, Managing Director Indresh Batra said in an e-mail interview. The New Delhi-based company is also seeing price increases in coking coal and iron ore and “this may have an impact on profit,” Batra said, without elaborating.
The manufacturer of pipes for crude oil, gas and water transportation, whose customers include Royal Dutch Shell Plc and Saipem SpA, yesterday reported a 42 percent fall in second- quarter revenue. Prices of coking coal, a key steelmaking ingredient, may climb to $200 to $220 a ton, Arun Kumar Jagatramka, chairman of Gujarat NRE Coke Ltd., said last month.
The iron-ore market is likely to remain “tight” because of a lack of new supply and increasing demand from China and higher infrastructure spending in India, according to Vale SA, the world’s biggest producer of the commodity. Prices more than doubled in the three months ended Sept. 30 to $128.21 per ton from $57.23 a year earlier.
Construction demand and higher spending on roads and power plants in Asia’s third-largest economy helped boost sales at India’s largest steelmakers in the fiscal second quarter, according to Tata Steel Ltd. and Steel Authority of India Ltd.
Jindal Saw is building a ductile pipes plant with an annual capacity of 200,000 tons in Mundra, western India, and has orders worth $700 million till Sept. 30, Batra said. The company aims to start production at the plant in two years and is planning to construct another 300,000 tons facility in Abu Dhabi, he said.
A project to build railroad wagons may also start operations in February once the company’s prototypes receive approval from India’s railway design and standards body, Batra said. Sales “may improve in subsequent years due to better quantitative performance,” he said.
Jindal Saw shares have climbed 21 percent this year in Mumbai trading, outperforming the 19 percent increase in the Bombay Stock Exchange’s benchmark Sensitive Index.
Savitri Devi, the company’s chairwoman, ranks fifth among India’s richest and with a net worth of $14.4 billion is the only woman in the top 10 list, according to Forbes Asia magazine.
To contact the editor responsible for this story: Stephen Foxwell in Mumbai at email@example.com