JSW Steel Said to Target Record Sales as India Demand Rises

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JSW Steel Ltd., India’s third largest steelmaker, is targeting record sales of the alloy this financial year as local demand for its wire rods, plates and pipes revives, people familiar with the plans said.

The company may market 13.5 million metric tons of steel in the year ending March 31, compared with about 12.2 million tons said to have been sold in the previous period, according to two people, who asked not to be identified as the information isn’t public. Most of the products will be supplied by JSW’s biggest factory in southern state of Karnataka and from one near Mumbai, they said.

Seshagiri Rao, group chief financial officer, declined to comment on the company’s targets.

Higher sales will boost free cash flow, which has been in the negative for seven consecutive years to March 31, 2014. The company expects sales to be supported by a revival in stalled projects, home purchases and car sales after India’s central bank cut interest rates.

The nation’s demand may expand by about 5 percent, the highest in four years, this financial year, according to a Bloomberg survey. Sales at JSW, owned by the billionaire Jindal family, were slower than India’s 3 percent consumption growth last year because of record imports from countries including China, Japan, South Korea and Russia, the people said.

The company will undertake a two month shutdown at its Dolvi plant near Mumbai this year to expand output by more than 50 percent to 5 million tons, the people said.

JSW was the only stock to gain on the benchmark S&P BSE India Metal Index, rising 0.7 percent to 962.70 rupees at the close in Mumbai. The stock has fallen 8.1 percent this year, compared with a 7.5 percent decline in the metal index.

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