Mumbai: JSW Steel Ltd, India’s third largest steel maker, is targeting record sales of the alloy this fiscal 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 tonnes of steel in the year ending 31 March, compared with about 12.2 million tonnes 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 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 31 March 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%, the highest in four years, this fiscal year, according to a Bloomberg survey. Sales at JSW, owned by the billionaire Jindal family, were slower than India’s 3% 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% to 5 million tonnes, the people said.
JSW gained as much as 2.2% to Rs.977.40 and traded at Rs.975.80 as of 12:18pm in Mumbai. The stock has fallen 6.8% this year, compared with a 2.6% gain in benchmark S&P BSE Sensex. Bloomberg
