Covid led to complete halt of railway, Metro orders: Jindal CEO

Your company is associated with Metro, railways and other transport-related units. What kind of business would these verticals be generating for the company?

JSLL has been a leading manufacturer of components for the railways and Metro coaches, both on tenders and long-term basis. Currently, we hold 13% of the market share when it comes to railway parts and Metro coaches. This segment accounts for approximately 40% of our overall business revenue.

Has the Covid-19 pandemic affected these segments?

Covid-19 resulted in a temporary setback after the rail and Metro operations were shut down, leading to a complete halt in orders for replacement or additional coaches, thereby lowering business volumes in 2021. However, the situation seems to be improving and we are happy to announce a substantial order for both rail and Metro parts this year. With the government pushing infrastructure development under the Gati Shakti initiative, we hope that this segment will pick up further traction.

Steel has faced stiff competition from China in terms of cheap imports. Has it affected you? If yes, by what percentage? If not, how did you cushion yourself from it?

Cheap imports from China and Indonesia are a major concern not only for larger conglomerates like ours but also MSME manufacturers. Import from China and Indonesia have increased by 170% compared to the last year. The availability of cheap but inferior quality steel has hit smaller industries the hardest. JSLL has been able to navigate through these challenges on the basis of superior quality, timely delivery and the years of meticulous relationships that we have maintained with our customers. Measures like Make In India have also helped in encouraging home-grown manufacturers. Currently, JSLL is at an extremely strong position, thanks to a healthy order book from our old and new customers.

What are your expectations from the budget?

During the 2021-22 Union Budget, the government had suspended countervailing duties (CVD) on stainless steel imports from China and anti-subsidy on imports from Indonesia which resulted in a growth of 172% in -imports of stainless steel products from these countries. This had a substantial impact on stainless steel product manufacturers across the country, including us, and going ahead we hope the Government will announce the reinstatement of CVD on foreign imports in this year’s Union Budget (2022-23). This will level the playing field for domestic manufacturers.

Has your order book reached pre-Covid levels? If not, what is the difference?

At present, our order position is at par with the pre-Covid numbers, however, the resurgence of Covid waves and consequent restrictions and market sentiments has had an effect on our growth trajectory. While still on the upswing, our projected numbers are yet to reach heights that we would have witnessed had the virus not swept across the country over the last two years.

What are the future investments considering the 2021-22 fiscal year? What is the expected turnover for the same?

At JSLL, we plan our investments carefully on the basis of future potentials and new product line-up. Most of our investments are planned towards capacity expansion by debottlenecking, automation and improving ESG and incorporating practices which would be beneficial to the overall business. We project a turnover of approximately Rs 450 crore this fiscal year if there are no further setbacks or negative sentiments due to the Covid-19.