JSW Steel Q2 result preview: Firm to benefit from lower costs, rise in volumes | Mint
Active Stocks
Fri Feb 23 2024 15:58:13
  1. Tata Steel share price
  2. 145.50 -0.24%
  1. State Bank Of India share price
  2. 759.40 -0.86%
  1. HDFC Bank share price
  2. 1,420.90 0.08%
  1. NTPC share price
  2. 337.70 -0.54%
  1. ITC share price
  2. 411.60 -0.65%
Business News/ Markets / Stock Markets/  JSW Steel Q2 result preview: Firm to benefit from lower costs, rise in volumes
BackBack

JSW Steel Q2 result preview: Firm to benefit from lower costs, rise in volumes

Q2 Preview: JSW Steel is seen benefitting from good volume growth as softer raw material costs sequentially will help . The steel price decline nevertheless may mean Ebitda/tonne at ₹10,527 decline from ₹12,340 in Q1FY24 though may rise multifold over ₹7,963 in Q2FY23 as per MOFSL estimates.

 JSW Steel, Premium
JSW Steel,

 

JSW steel Ltd will report its Q2 performance on Friday. While the strong steel demand in the country  is likely to support company’s volume growth, the benefits of lower raw material prices in the previous quarters will flow during Q2.

The steel prices in the country, however, had continued to soften till July. Though steel prices have been regularly improving thereafter during the quarter and have improved much by Q2 end, nevertheless average steel prices in Q2 may still be lower than Q1. The Hot Rolled Coil (HRC) prices as per Motilal Oswal Financial Services Ltd (MOFSL) estimates averaged 2% lower sequentially.

The lower realizations may limit revenue and profitability growth even though higher volumes may  accrue positives.

JSW Steel already had reported its consolidated Crude Steel production for the second quarter of FY24, which at 6.41 mt (million tonne) marked a growth of 13% YoY. Sequentially it was downs marginally by 3%, primarily due to scheduled shutdowns undertaken at Indian operations and lower capacity utilisation at USA-Ohio due to market conditions. Domestic steel production (standalone) grew 13% year-on-year to 6.27 mt, down 2% sequentially. Analysts at MOFSL said that JSW Steel is expected to post higher volumes sequentially in 2QFY24.

Also Read- IGL, MGL shares tank up to 11% as Delhi government approves EV policy

Analysts at Kotak Institutional Equities expect JSW Steel to report standalone volume of 5.3 million tons up 6% year-on-year, 7.7% sequentially. They estimate steel realization to decrease by 2.5% sequentially (flat year-on-year) led by price cuts during the quarter

The company’s sales at Rs42,300 crore are expected to rise 1.2% sequentially. Though Ebitda at 6600 crore may rise three folds from year ago quarter it may decline 6.8% sequentially. The Ebitda per tonne thereby at 10,527 is likely to be lower than 12,340 in the previous quarter though may go multifold 7,963 in the year-ago quarter as per MOFSL estimates.

Also Read-Suzlon share price at 9-year high, rises 350% in FY24. Good oppportunity for bulls?

The company is likely to report net profits at 2100 Crore during the quarter versus a loss during the year ago at the consolidated level. On sequential Basis may decline by about 8.5%

JSW Steel prices were down more than 2% on Friday in the afternoon trades

 

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

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. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 20 Oct 2023, 01:57 PM 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
Switch to the Mint app for fast and personalized news - Get App