Mumbai, May 16 (PTI) Sajjan Jindal-led JSW Steel today said the company has decided to invest an additional Rs 17,600 crore for increasing its steel capacity to 24.7 million tonne per annum (mtpa) by 2020.

“Looking at the domestic demand growth, we see a shortage of steel if we don’t expand in the next two years,” JSW Steel joint managing director and group chief financial officer Seshagiri Rao told reporters here while announcing almost two-fold rise in consolidated net profit to Rs 2,879 crore in the March quarter, against Rs 1,008 crore in the year-ago quarter.

“We have decided to expand our capacity from 18 mt (million tonne) to 24.7 mt, which includes addition of one mt at Vijaynagar and 0.67 mt at Dolvi unit, and also expand our downstream projects by 2020,” he said.

The overall estimated capex plan of Rs 26,815 crore announced last year is expected to be enhanced by Rs 17,600 crore to implement new projects, Rao said, adding, “Overall, the company is now implementing a cumulative capex pipeline of Rs 44,415 crore by March 2020.”

With the company already spending about Rs 4,700 crore in FY18, it plans to spend the balance Rs 39,715 crore over the next three years, according to him.

These projects are planned to be funded by a mix of debt of Rs 25,000 crore and internal accruals of around Rs 19,000 crore, Rao said.

Meanwhile, the total income of the company increased by 16 per cent to Rs 20,862 crore in the March quarter, against Rs 17,973 crore in the same quarter last year.

During financial year 2017-18, the company reported 76 per cent year-on-year rise in net profit at Rs 6,113 crore.

Its net debt reduced by Rs 4,048 crore during the quarter and by Rs 3,529 crore during the year, despite higher activity levels, the company said in a statement.

Rao pointed out that the domestic growth outlook is improving as structural reforms are expected to increase productivity and incentivise investments.

The domestic steel demand grew at a healthy rate of 8 per cent in the March quarter, however, imports remained at elevated levels in FY18, indicating that the trade remedial measures in place are ineffective, he said.

Rao expects the steel consumption in India to grow by 7-7.5 per cent in FY19 on the back of government push for infrastructure projects and strengthening consumer demand.

The private steel giant hopes that the 17 per cent growth in the automobile industry, 14 per cent in the appliances industry and infrastructure and housing sector growth will create huge demand for domestic steel players.

Commenting on the guidance, Rao said the company is looking at a 3 per cent jump in steel production at 16.75 mt and 2.5 per cent increase in sales at 16 mt in FY19.

He said the company is awaiting NCLT approval for Monnet Ispat and Energy (MIEL) acquisition. JSW Steel and AION Investments Private II (AION) had submitted a bid for MIEL under the corporate insolvency resolution process of the Insolvency and Bankruptcy Code 2016.

JSW Steel is a part of the diversified JSW Group, which has presence in steel, energy, infrastructure, cement and JSW Ventures.

The company’s scrip closed at Rs 336.65, up 0.87 per cent on the BSE, against 0.44 per cent decline in the benchmark.

This is published unedited from the PTI feed.