JSW Steel reports Rs. 2,773cr profit on strong domestic demand
JSW Steel posted a consolidated net profit of Rs. 2,773 crore for the September quarter, a major turnaround from a net loss of Rs. 848 crore during the same period last year. The company's consolidated revenue saw a 6.7% year-on-year increase, reaching Rs. 44,584 crore. This growth was mainly fueled by robust domestic demand and the liquidation of 0.3 million tonnes of inventory during the quarter. JSW Steel's total sales volumes experienced an 11% quarter-on-quarter and 10% year-on-year surge.
Operating margin expansion and cost reduction
The company's consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) reached Rs. 7,886 crore, with an operating margin expanding by 1,350 basis points to 17.7% from 4.2% a year ago. JSW Steel's Indian operations reaped the benefits of lower coking coal prices and a slight decrease in iron ore costs on a quarter-on-quarter basis. Year-on-year, costs at Indian operations dropped primarily due to reduced coking coal prices.
JSW Steel's capex utilization and future guidance
In Q2 FY24, the company spent Rs. 3,816 crores on capital expenditures in India. For the first half of FY24, the total capex amounted to Rs. 7,996 crores, falling short of the planned Rs. 20,000 crores for the full FY24. As for crude steel production, the company produced 6.41 million tonnes in Q2FY24 and sold 6.39 million tonnes. The company's target for the full year FY24 is to produce 26.34 million tonnes and sell 25.00 million tonnes.
Stock performance and future outlook
JSW Steel's stock closed at Rs. 769.40, down by 1.42% compared to the previous close of Rs. 780.45 on NSE. Over the past month, the stock has lost 0.86%, but has gained 8.58% in the past six months. The company remains optimistic about the future, citing strong momentum in infrastructure, energy transition, defense, and PLI schemes driving capital expenditure in India.
