In Short:
The company has reduced its export forecast to 10% of sales, down from last year’s 15%. Economic recovery in Europe has stalled, prompting a cautious approach in those markets. They are exploring new opportunities in Japan, the Middle East, and South Korea while focusing on domestic demand, which is strong. Recent financial results show slight growth in revenue, but drops in profit margins.
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<h1>Jindal Stainless Revises Export Strategy Amid Economic Challenges</h1>
<p><strong>Jindal Stainless</strong> has announced a shift in its export strategy, lowering its guidance to 10% of total sales, compared to last year's target of 15%. This change comes as the company grapples with rising costs that it cannot pass on to customers, leading to a temporary restriction on export supplies until there is a clear improvement in the market.</p>
<h2>European Market Struggles</h2>
<p>Despite some early signs of recovery in certain European economies, such as <strong>Germany</strong> and <strong>France</strong>, these nations have struggled to maintain their momentum. As a result, Jindal has made a strategic decision to take a more cautious approach to these markets. “We have taken a conscious call to go a bit slow on some European markets since economic rebound has not been on expected lines,” said <strong>Jindal</strong>. The company is now focusing on expanding its footprint in new markets like <strong>Japan</strong>, the <strong>Middle East</strong>, and <strong>South Korea</strong>, with potential plans to increase its presence in <strong>Canada</strong> if there are measures against Chinese dumping through tariffs.</p>
<h2>Export Volumes and Revenue Insights</h2>
<p>In the second quarter of FY25, Jindal Stainless' export volumes remained consistent with the first quarter. While there have been increases in exports to the US, Middle East, and South Korea, the European Union has seen a decline, attributed to lower end-user demand and escalating shipping costs. Ultimately, despite growth in new markets, it hasn't quite compensated for the drop in exports from key European nations.</p>
<p>Looking back to the first half of FY25 (April - September), exports constituted 10% of total sales, down from 15% during the same period last year. “For the full fiscal, we are looking to maintain exports at 10% of total sales," Jindal emphasized, highlighting the robust demand observed in domestic markets.</p>
<h2>Financial Performance Overview</h2>
<p>In terms of financial performance, standalone net revenue for Q2FY25 (July - September) reached ₹9,746 crore, a slight increase of 0.26% year-on-year from ₹9,720 crore. However, EBITDA fell to ₹1,007 crore, down 6% year-on-year compared to ₹1,070 crore; while profit after tax (PAT) stood at ₹589 crore, marking a 3.30% decrease from ₹609 crore the previous year.</p>
<h3>Domestic Demand on the Rise</h3>
<p>On a more positive note, domestic demand has been strong, largely driven by sectors such as consumer durables, automobiles, railways, and infrastructure. Regarding the issue of Chinese dumping of stainless steel, Jindal noted that the company, together with the stainless steel association, is actively engaging with the government, with meetings currently taking place.</p>
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