- 28 Oct 2024
- ICICI Securities
JSW STEEL REPORTS MUTED PERFORMANCE IN Q2FY25; GUIDED FOR BETTER RECOVERY IN H2FY25
News: Total operating income on consolidated basis for Q2FY25 came in at ₹39,684 crore (down 11% YoY, 8% QoQ) with steel sales volume of 6.13 MT (down 3% YoY, flat QoQ). Reported EBITDA for the quarter came in at ₹5,437 crore with corresponding EBITDA margins at 13.7% (up 90 bps QoQ). Standalone EBITDA/tonne stood at ₹8,757 vs ₹8,399 in Q1FY25. Consolidated PAT for the quarter stood at ₹404 crore.
Views: On standalone basis, Total operating income for Q2FY25 came in at ₹30,778 crores (down 9% YoY, 6% QoQ) with steel sales volume at 5.3 MT (down 2% YoY and up 4% QoQ). Average Blended Sales Realisation declined by ~₹6,000/ ton reaching to ₹58,000/ton vs ₹64,150/ton in Q1FY25. However, part of this was offset by decline in raw material cost which was down by ~₹5000/ton on QoQ basis. The company anticipates better performance with spreads to have bottomed out in Q2FY25 and margins expected to improve in H2FY25 supported by increased output from new capacities, lower coking coal cost, and an uptick in steel prices. Based on this, the company has reaffirmed its production and sales volume targets of 28.4 MT and 27 MT for FY25. We maintained our positive stance on JSW Steel given its strategic capacity expansion, favourable steel demand domestically and anticipated profitability improvement.
Impact: Positive