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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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