JSW Steel Q2 Results: Margin Surges, Earnings Beats Estimates
The company's net profit was at Rs 2,773 crore in Q2 FY23, compared to a net loss in the same period last year.
JSW Steel Ltd. reported a profit in the second quarter, beating analysts' estimates.
The company's net profit was at Rs 2,773 crore in the quarter ended September, as compared to a net loss of Rs 905 crore over the same period last year, according to an exchange filing on Friday. That compares with a Bloomberg consensus estimate of Rs 2,419 crore.
JSW Steel Q2 FY24 Key Highlights (Consolidated, YoY)
Revenue up 6.72% at Rs 44,584 crore versus Rs 41,778 crore (Bloomberg estimate: Rs 42,540 crore).
Ebitda up 350.11% at Rs 7,886 crore versus Rs 1,752 crore (Bloomberg estimate: Rs 7,122 crore).
Ebitda margin at 17.69% versus 4.19% (Bloomberg estimate: 16.7%).
Net profit of Rs 2,773 crore versus net loss of Rs 915 crore (Bloomberg estimate: Rs 2,419 crore).
Consolidated crude steel production grew 12.85% YoY to 6.41 million tonne in Q2 FY24, while consolidated steel sales rose 10.74% YoY to 6.39 million tonne.
Volume growth was partially offset by a 4% YoY decline in net sales realisations at its Indian operations.
Average capacity utilisation for the quarter stood at 89%. The share of value-added products increased to 62% of total sales from 61% in the first quarter of FY24.
The quadrupling in operating profit was driven by reduced costs, supported by strong volume. The cost of materials consumed dropped by 9.56% YoY to Rs 21,485 crore, while power and fuel costs fell 16.9% YoY to Rs 3,824 crore.
The company also incurred a tax impact of Rs 895 crore pertaining to prior year write-offs and remeasurement of deferred tax assets as the company has opted to shift to the new tax regime.
The company has maintained its FY24 production guidance of 26.34 million tonne and sales of 25 million tonne.
The company plans to increase capacity by 6.5 million tonne in FY24, from expansion of the Vijayanagar plant and Bhushan Power and Steel Ltd.
The company also plans to increase its consolidated capacity to 38.5 million tonne by FY25, from the current capacity of 29.7 million tonne. It plans to expand capacity to 50 million tonne by FY31.
Announcements
JSW Steel announced that its U.S.-based unit Periama Holdings LLC will acquire the remaining 10% stake in JSW USA from Green Suppliers and Services, after the latter intimated their intention to sell stake.
The stake will be bought for a consideration of $1,000, making JSW USA a wholly owned subsidiary of the company
Q2 Updates
JSW Steel entered into a 50:50 joint venture with Japan-based JFE Steel to manufacture and sell cold-rolled, grain-oriented electrical steel products, with an estimated project cost of Rs 5,500 crore.
The company surrendered the Jajang iron ore mine in Odisha, with reserves of 39.4 million tonne. At the same time, it was declared as the preferred bidder for Jaisinghpura North Block in Karnataka, with projected iron ore resources of 17.6 million tonne.
The company completed 100% acquisition of National Steel’s NSL Green Steel Recycling Ltd., with the objective of increasing usage of steel scraps in steel production.
Shares of JSW Steel closed 1.13% lower at Rs 771.65 apiece, as compared with a 0.42% decline in the benchmark NSE Nifty 50. The stock pared losses after the results were announced, closing 1.2% from the day's low of Rs 761.9 per share.
