- JSW Steel’s net income for the third quarter was 7.17 billion rupees, missing the estimate of 7.37 billion rupees, marking a 70% decrease from the previous year.
- The company’s revenue stood at 413.8 billion rupees, down by 1.3% year-over-year, and slightly below the estimated 417.03 billion rupees.
- Total costs increased by 3.7% year-over-year to reach 402.5 billion rupees.
- Raw material costs fell by 8.9% year-over-year to 221.2 billion rupees.
- Expenses related to purchased power, fuel, and transmission rose to 40.88 billion rupees, a 6.7% increase, exceeding the estimate of 38.27 billion rupees.
- Other income decreased by 24% year-over-year to 1.47 billion rupees.
- Operating EBITDA was 55.8 billion rupees, a 22% decline year-over-year, but above the estimate of 52.59 billion rupees.
- EBITDA margin decreased from 17.1% year-over-year to 13.5%.
- The company’s net debt was reported at 809.2 billion rupees, with a net debt/EBITDA ratio of 3.57 times.
- Crude steel production rose by 2.3% year-over-year to 7.03 million tons, while steel sales increased by 12% year-over-year to 6.71 million tons.
- JSW Steel expects ramp-up of the expansion project in the fourth quarter.
- The company noted ongoing geopolitical tensions and potential tariff escalations may continue to affect inflation and global growth.
- A 0.12 million tons per annum colour coated line in Jammu & Kashmir began operating in the third quarter and is currently in trial-run phase.
- The 30 million tons per year slurry pipeline in Odisha is progressing well, with commissioning expected in the fiscal year 2027.
- Capital expenditure for the third quarter was 30.87 billion rupees.
- Analyst recommendations include 17 buys, 7 holds, and 8 sells for JSW Steel.
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JSW Steel Ltd on Smartkarma
Analyst coverage of JSW Steel Ltd on Smartkarma showcases a diverse perspective on the company’s performance. Trung Nguyen‘s ESG Report highlights JSW Steel as the largest steel producer in India and the seventh-largest globally. With a significant capacity of 34.7 mtpa, predominantly in India, the company has a strong presence in the industry.
On the other hand, Trung Nguyen‘s Earnings Flash report, in collaboration with Lucror Analytics, presents a more cautious view. The analysis suggests weaker Q2 FY 2024-25 results, driven by declining revenue, reduced earnings, and negative FCF due to lower steel prices and intense competition from cheap imports. Despite JSW Steel’s aim for improvement in the second half of the fiscal year, concerns over debt, softening earnings, and liquidity persist in the analysis.
A look at JSW Steel Ltd Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 4 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
JSW Steel Ltd, an integrated steel producer with manufacturing facilities across India, presents a mixed long-term outlook based on Smartkarma Smart Scores. With a Value score of 3, the company is deemed to offer fair value for investors. Coupled with a solid Dividend score of 4, JSW Steel Ltd demonstrates a commendable commitment to rewarding its shareholders. However, the Growth and Resilience scores, both at 2, suggest there may be challenges in terms of future expansion and navigating unforeseen economic disruptions. The Momentum score of 3 indicates a moderate performance trend that is neither significantly positive nor negative.
In summary, JSW Steel Ltd, a producer of various steel products, is positioned with a balanced overall outlook, with strengths in dividend distribution and a reasonable valuation. However, potential weaknesses in growth prospects and resilience may warrant further attention from investors seeking long-term stability and growth in the steel industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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