JSW Steel plans capex of ₹25,115 crore
Premium- Over the past three years, JSW has deployed over ₹48,000 crore of capex to increase its production capacity by 50% through organic and inorganic routes without increasing its debt.
Sajjan Jindal-led steelmaker JSW Steel Ltd will deploy as much as ₹25,115 crore towards capital expenditure for the next phase of its growth plans, the company said in its annual report released on Wednesday.
“We are now embarking on the next phase of growth with the newly approved capex plan of ₹25,115 crore. This capital will allow us to augment our crude steel capacity at Vijayanagar by 7.5 MTPA (million tonnes per annum), enhance and digitize our mining capabilities and infrastructure in Odisha and help us set up a state-of-the-art colour-coated facility in Jammu & Kashmir – to support local demand and development in the state," Sajjan Jindal, chairman and managing director of JSW Steel said in the annual report.
MORE FROM THIS SECTIONSee All
“In addition, we are focusing on upgrading our acquired facilities through efficiency-enhancing projects. Together, these initiatives will see the combined capacity of JSW Steel, including JVs and associates, expand to ~37.5 MTPA by FY 2024-25."
Over the past three years, JSW has deployed over ₹48,000 crore of capex to increase its production capacity by 50% through organic and inorganic routes without increasing its debt, he said.
"Our balance sheet is getting stronger as we improve cash flows and efficiently allocate capital. With the new capacities and strong price environment, we expect our net-debt to Ebitda ratio to be about 2.75. We are consistently reducing our cost of capital with access to diverse pools of liquidity and strong relationships with institutions across the world," said Jindal.
In FY21, despite higher iron ore and energy prices with better average realizations, cost optimization and efficiencies, JSW's topline grew by 9%, and operating earnings before interest, tax, depreciation and amortization (Ebitda) increase to ₹20,141 crore, a rise of 70% from ₹11,873 crore for the previous year.
“Our efficient capital allocation and industry-leading project execution skills means that we are able to scale capacity at industry leading capex per tonne, in record time. We have delivered an industry-leading total shareholder return CAGR of 24% over the past 10 years, which validates our efficient capital allocation and execution. The Board has recommended a dividend of ₹6.5 per share, which is our highest ever, and will lead to a total payout of ₹1,571 crore," said Jindal.
"We are also recalibrating our R&D from a process-oriented approach to a product-oriented approach. As a result, our innovation and research function will increasingly focus on understanding customer requirements and develop a larger variety of specialty grades as well as specialised solutions to meet our customer’s evolving requirements."
For the Month of May, the steel maker’s capacity utilization remained at 91% as the liquid oxygen supplies were over 30,000 tonnes for medical purposes from the steel complexes of the company across India, against over 20,000 tonnes in April 2021.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!