JSW Steel Q4 Results Review - Inline Revenue; Ebitda Below Estimates: IDBI Capital

IDBI Capital Report

JSW Steel Ltd.’s Q4 FY24 Ebitda was 8% below our forecast. In Q4 FY24, consolidated revenue grew 10.3% QoQ on sales volumes growth of 12.2% QoQ and weak realisation due to lower steel prices. Ebitda decreased by 15% QoQ led by higher coking coal prices. In Q4 FY24, net debt decreased by Rs 53 billion QoQ to Rs 739 billion on debt repayment.

Further, JSW Steel acquired ~92% stake in a company at a cost of $74 million (EV $80 million), securing 800 mn tonne of hard coking coal reserves to improve raw material security.

Moreover, JSW expects sales volume to grow by 9% in FY25.

We cut FY25/FY26 Ebitda estimates by 8%/6% and value the stock at an enterprise value/Ebitda multiple of seven times FY26 Ebitda to derive a target price of Rs 832 (earlier Rs 829) and maintain Hold rating on the stock.

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