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JSW Steel, part of the $12 billion JSW Group, today announced it will invest Rs 39,715 crore over the next three years in significantly ramping up capacity, including two power plants, pellet project and coke over plants.
The announcement was part of a statement made by the company on its fourth quarter performance. The firm reported a 186 per cent jump in net profit at Rs 2,879 crore for the quarter ended March over a 16 per cent increase in total income at Rs 20,817 crore.
“The Company will set up power plants of 175 MW and 60 MW to effectively utilise flue gases and steam generated from Coke Dry Quenching (CDQ), which will lead to savings in power,” JSW Steel said.
The company had announced an overall estimated capital expenditure plan of close to Rs 26,815 crore last year. The plan is now expected to be enhanced by Rs 17,600 crore to implement a set of new projects including the power plants, a 8 MTPA pellet plant and 1.5 MTPA coke oven plant at its Vijaynagar project apart from a new coke oven plant of 1.5 MTPA capacity at Dolvi in Maharashtra.
“Overall, the company is now implementing a cumulative capex pipeline of Rs 44,415 crore over a 4-year period between FY2018 and FY2021. With spend of about Rs 4,700 crore in FY2018, the company plans to spend the balance Rs 39,715 crore over the next 3 years,” JSW Steel said. It added that these projects are planned to be funded by a mix of debt and internal accruals in a manner that will allow keeping the overall leverage ratios within the targeted threshold levels.
The private steel giant also said India’s economic growth outlook is improving with effects of demonetisation and GST slowly fading away. Structural reforms are expected to increase productivity and incentivise investments and Gross fixed capital (GFC) formation continues to grow with the government spending on infrastructure. The steel-maker, however, said surging crude oil prices pose a risk to domestic inflation and Indian currency in the near term.
The company’s share price at the Bombay Stock Exchange (BSE) today closed at Rs 336.65, up 0.87 per cent as compared to previous close.
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