Big Billion Days

JSPL's steel production during the April-June quarter of the fiscal surged 20% y-o-y to 2.01 million tonnes (June 21 - 0.64 million tonnes), marking a record first quarter production and second highest quarterly production ever. The company said that the decision to divert oxygen towards saving precious lives led to production getting impacted slightly, still it was able to produce more than before.

While this will drive steelmakers to double down on capital expenditure, robust accruals will help them continue deleveraging and strengthening of balance sheets, leading to a positive credit outlook, a CRISIL study of the top five steelmakers - accounting for 58 per cent of domestic production last fiscal has showed.

Besides, ICRA expects domestic demand to recover in the coming months with the gradual lifting of lockdowns and mobility restrictions in India during June 2021 and improving vaccination coverage. This trend in turn will result in a pick-up in capacity utilisation levels, the agency said.

The improvement was driven by supply-chain efficiencies, higher exports, and captive mines that limited the impact of iron ore shortage. Their capacity share is expected to rise this fiscal after JSW's Dolvi plant expansion of 5.6 million tonne comes on stream, the report added.