JSW Steel Q2 Results Review - Revenue Inline; Lower-Than-Expected Costs Drive Earnings Beat: Motilal Oswal

Motilal Oswal Report

JSW Steel Ltd.’s Q2 FY25 performance has improved, as the reduction in realizations was more than offset by the decline in costs. We believe JSW Steel is well placed with new capacities coming on-stream, strong domestic demand, and a rising share of value-added proportion in the sales mix.

Its focus on increasing the captive share of iron ore and improving coal linkages will support earnings.

In H2 FY25, we expect revenue/Ebitda/adjusted profit after tax to grow 14%/24%/74% YoY driven by healthy volume, improving realization coupled with muted costs.

At current market price, JSW Steel trades at 6.3 times FY27E enterprise value/Ebitda and we maintain our estimates for FY25/FY26/FY27.

We reiterate our Buy rating on the stock with a target price of Rs 1,200 (premised on eight times EV/Ebitda on Sep’26).

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