Q4 Results Review: JSW Steel share price price that has risen around 17% in last 6 months, scaled 52 week highs on Friday, ahead of Q4 results that were reported after market hours.
JSW Steel reported sales and production growth remained strong and standalone sales at 5.69 MT in Q4 grew 9% year-on-year and for the year at 21.22 also grew 8% year-on-year. The company also highlighted it achieved combined annual production of 26.68 million tonne against its guidance of 26.34 million tonnes, which is a 101% achievement. The sales Guidance was also met, with a 100% achievement.
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Firm production and sales expectations
With ongoing expansions, strong domestic steel demand and rising export opportunities analysts expect strong uptick in production and sale performance. Analysts at Motilal Oswal Financial Services Ltd say Going forward, they expect JSW’s domestic volumes to be robust with increasing capacities, a better product mix, and export opportunities.
Operating performance to be supported softening coal, operating efficiencies
The financial performance though strong, nevertheless showed impact of volatility in steel prices and raw material prices too.
The EBITDA reduced by 15% sequentially, driven by lower sales realizations and higher coking coal cost. The consolidated reported profit for the quarter At ₹1,322 crores, down by 46% sequentially and around 64% year-on-year. During 4QFY24, coking coal costs increased by $22 per tonne, which had an impact on earnings said analysts.
However given the current decline in coal prices analysts remain positive on outlook for JSW Steel. Notably 1QFY25 coal expenses are expected to be lower by $22 and 27 per tonne estimate analysts at Motilal Oswal Finacial Services.
Given stable steel prices coupled with operational efficiencies, analysts at MOFSL expect its Earnings Before interest tax depreciation and amortisation (Ebitda per tonne) to improve going forward. Analysts at MOFSL have raised their revenue and Ebitda estimates by 2% and 5% respectively for FY25 and 4% and 7% for FY26.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
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Published: 20 May 2024, 10:57 AM IST
