JSW Steel shares climb 3% after better-than-expected Q1 results

Shares of JSW Steel jumped 3 per cent in Friday's trade following the steelmaker's June quarter results, though the stock cut gains as the session progressed. The company said its consolidated profit surged nearly three folds to Rs 2,428 crore in the June quarter compared with Rs 839 crore in the same quarter last year. Total revenue for the quarter jumped to Rs 42,213 crore from Rs 38,086 crore YoY. Ebitda margin came in at 16.7 per cent.

Following the development, the stock rose 3.03 per cent to hit a high of Rs 823.35 on BSE. JSW Steel said Ebitda fell sequentially amid lower sales volumes, higher cost of iron ore partially offset by marginal increase in realisations on the back of higher export prices and higher Ebitda from the overseas operations.

"Consolidated Ebitda declined 11 per cent QoQ to Rs 7,040 crore (up 64 per cent YoY; better than our estimate of Rs 5,500 crore ) on higher mining premiums and employee costs. On YoY basis, lower power & fuel cost and lower RM cost are largely in-line. Increase in inventory drove Ebitda beat on consolidated level," Prabhudas Lilladher said.

JSW Steel said consolidated crude steel production for the quarter stood at 6.43 million tonne, up 11 per cent  YoY (down 2 per cent sequentially). The steelmaker had taken certain scheduled shutdowns at Indian operations during the quarter. Therefore, the average capacity utilisation for the June quarter fell to 92 per cent against 96 per cent in the June quarter.

Steel Sales for the quarter stood at 5.71 million tonne, up 27 per cent YoY (down 13 per cent) QoQ, impacted by channel deͲstocking, with exports also being impacted by delayed loading due to the cyclone on the western       coast of India towards the end of the quarter.

JSW STeel said its consolidated net gearing (net debt to equity) stood at 0.96 time at the end of the quarter against 0.89 time at the end of Q4. Net debt-to-Ebitda ratio stood at 3.14 times against 3.20 times at the end of Q4. The Net Debt increased to Rs 66,797 crore during the quarter, driven mainly by higher working capital.

Also read: Stocks that market analysts recommended on July 21, 2023: Titagarh Rail Systems, Polycab India, Bank of Maharashtra, VRL Logistics

Also read: Hot stocks on July 21, 2023: Suzlon Energy, South Indian Bank, Polycab India, Infosys, and more