JSW Steel, Hindalco: 2 Nifty cos may report up to 330% jump in Q3 profit! Share price targets & more

Motilal Oswal Securities, which expects 17 out of 50 Nifty constituents to report over 30 per cent jump in December quarter profit, believes two companies from the metals & mining sector namely JSW Steel Ltd and Hindalco Industries to log up to 330 per cent jump in bottomlines for the quarter gone by. Ten others are seen logging a decline in profits for the quarter, as per the brokerage. Other brokerages such as Nuvama and Prabhudas Lilladher also anticipated strong YoY bottomline growth figures for the two Nifty companies.

JSW Steel Q3 results preview

In the case of JSW Steel, Motilal Oswal expects the steelmaker to log 328 per cent YoY rise in profit at Rs 2,101.40 crore on a 5.1 per cent YoY rise in sales at Rs 41,138.90 crore. Ebitda is seen rising 44.9 per cent to  Rs 6,589.90 crore. On a sequential basis though, the numbers are seen tepid. Another brokerage Prabhudas Lilladher expects JSW Steel to log 258 per cent surge in adjusted profit at Rs 1,760 crore. It sees sales rising 9 per cent to Rs 42,670 crore.

JSW Steel is expected to post a sequential decline in volumes for the quarter, with Coal costs expected to stay elevated. Motilal Oswal said the management commentaries on capex is important and the performance of domestic and overseas subsidiaries will be crucial.

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"Expect 2 per cent QoQ improvement in NSR as steel prices had increased till end October; India volume to grow 3 per cent YoY to 5.1 mt; Ebitda/tonne to decline by Rs 1,600 QoQ to Rs11,200 on account of weak NSR, higher RM cost and lower operating leverage. Expect weak performance from overseas subsidiaries to continue," PL said.

For the steel sector as a whole, Motilal Oswal said: "We expect the steel sector to report mixed performance due to reduced seasonal demand and higher cost, resulting from an increase in iron ore and coal prices. However, it would be partially offset by an improvement in ASP. The impact on the volumes are due to weak export volumes in 3QFY24 and lower demand in the domestic market due to multiple long holidays," it said.

Hindalco Industries Q3 results preview

In the case of Hindalco, Motilal Oswal sees profit rising 111.50 per cent YoY to Rs 2,881 crore on a 4.5 per cent drop in sales at Rs 50,756 crore. Ebitda for Hindalco is seen rising 73.7 per cent YoY to Rs 6,163 crore. Motilal Oswal said Novelis sales volumes are expected to be lower on a sequential basis and that its Ebitda per tonne guidance of $525 per tonne is crucial to track.

"The timeline on the commissioning of multiple capex is crucial and We await management guidance on domestic aluminum demand along with the hedging position," it said.

PL, however, sees 50 per cent rise in Hindalco's adjusted profit at Rs 2,050 crore.

Nuvama said Hindalco’s aluminium including Utkal alumina Ebitda shall inch up 13 per cent QoQ, owing to higher aluminium prices and marginally lower cot of production due to higher materialisation of linkage coal. However, Novelis’s Ebitda per tonne shall fall to $490 due to lower volume amid seasonality, it said.

This brokerage see profit for Hindalco to rise 87 per cent YoY to Rs 2,550 crore.

PL sees Hindalco Industries shares at Rs 673 and JSW Steel at Rs 992. Hindalco's average share price target at Rs 569 suggests a 2 per cent downside potential, as per data publicly available with Trendlyne. In the case of JSW Steel, the average target price of 788 suggests 5 per cent potential downside.

              

 

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