Active Stocks
Fri Jun 14 2024 15:58:47
  1. HDFC Bank share price
  2. 1,597.45 1.05%
  1. State Bank Of India share price
  2. 840.20 -0.44%
  1. Tata Steel share price
  2. 183.05 0.30%
  1. ICICI Bank share price
  2. 1,105.10 -0.20%
  1. Kotak Mahindra Bank share price
  2. 1,717.00 -0.54%
Business News/ Markets / Stock Markets/  JSW Steel: Should you Buy, Sell, or Hold stock post Q4 results impacted by higher coal costs?
BackBack

JSW Steel: Should you Buy, Sell, or Hold stock post Q4 results impacted by higher coal costs?

Q4 Results Review: JSW Steel share price has risen 17% in six months scaled 52 week highs on Friday ahead of results posted after market hours. The Q4 earnings were supported by rising production and sales, nevertheless impacted by higher coal costs. Should you Buy, Sell or Hold the stock post Q4?

JSW Steel share price: 2 key reasons why Motilal Oswal expects 20% upside Premium
JSW Steel share price: 2 key reasons why Motilal Oswal expects 20% upside

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.

Also Read- Multibagger Stock: Shriram Pistons & Rings gains 157% in a year, records over 500% growth in 2 years

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.

Also Read- Multibagger Mazagon Dock Shipbuilders' share price jumps 14.5% to hit all-time high: Should you buy, sell or hold?

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

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 20 May 2024, 10:57 AM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started