Jindal Steel & Power in talks with state electricity boards for PPAs, says MD Sharma

VR Sharma, MD of Jindal Steel & Power (JSPL), spoke to CNBC-TV18 about the company's financial performance and shared outlook for FY20.

“The company has done very well in the first quarter and the EBITDA level per tonne is more than Rs 11,200 and overall EBITDA is 23 percent of the total turnover,” said Sharma.

"We expect the solid tempo to continue in Q2 for steel business. Therefore, aim to improve EBITDA per tonne to Rs 12,000 from Rs 11,200 in Q1,” Sharma said.

Talking about the business, he said, “In TMT and rebars, we are at par with the other peer group in the industry but we have some of the added advantages in terms of geography, location because most of our products are sold with 6 states around our manufacturing facilities, so our cost of production is less than many of the other peer group.”

On the global business front, Sharma said, “As far as Oman is concerned, the Middle East has seen negative growth in last one quarter but Q2 onwards normally the demand goes up. We are expecting good results from Oman in Q2.”

"We are optimistic that steel prices will move up in the next 2 weeks," said Sharma.

Speaking about PPAs, the MD said, "The company is in discussion with state electricity boards like Kerala for power purchase agreements (PPAs).

On the debt front, Sharma said, “We had a debt of Rs 39,500 crore at the beginning of the year. We have paid approximately Rs 1,500 crore in Q1. We will pay another Rs 4,000 crore in next 3 quarters and this will bring down our total debt from Rs 39,500 to below Rs 35,000 crore.”