Jindal Steel & Power shares declined nearly 5% to Rs 402.05 on the BSE at 9:20 am on Wednesday after reporting weak Q3 results.

The company reported a 27.2% decline in consolidated profit for the quarter ended December 2021 at Rs 1,866.08 crore, owing to increasing costs. According to a BSE filing, Jindal Steel & Power made a combined profit of Rs 2,566.68 crore during the same time last year.

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However, the company’s consolidated income grew to Rs 12,535.35 crore during the October-December quarter, up from Rs 9,643.88 crore the previous year.

The company said in a statement that its “consolidated PAT of Rs 1,622 crore declined by 34% year on year due to reduced operational profit and increased tax expense.”

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While domestic demand improved sequentially in the third quarter of FY22, the period was hampered by unseasonal rains, a scarcity of railway rakes, and dampened demand despite growing COVID-19 cases.

Steel demand in India fell 7% year on year in the third quarter of the current fiscal year.

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This quarter, the company sold more domestically, mirroring the industry trend. The government’s recent infrastructure push, increasing rake availability, and rising private Capex could raise domestic steel demand even further.

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In terms of the forecast, the company stated that the domestic steel sector is still dealing with a spike in coking coal costs.

However, supplies of coking coal from captive mines in Mozambique and Australia, as well as iron ore from the Kasia and Tensa mines, could offer some respite from mounting costs and assure sustained availability.