Sell

SAIL’s Q2FY26 reported EBITDA, at INR 25.2bn, was 23% better than our estimates, driven by higher sales volumes, better by-product sales and operating leverage.

JSP reported adjusted EBITDA of Rs29.8bn (+14.0% vs Emkay estimate; +15.6% vs consensus; +20.3% QoQ).The sequential improvement was mainly led by a reduction in coking coal cost by USD11/t and QoQ better realization, which was partially offset by a 10.8% sequential decline in sales volume (owing to early onset of monsoons and intentional rebuilding of inventories).

JSP reported adjusted EBITDA of Rs24.8bn (+9.8% vs Emkay; +1.5% vs consensus; +16.4% QoQ), led by lower coking coal cost and sequentially better production and sales volume of 2.1mt.

Quarterly Update Q1FY25

While SAIL clocked sequential improvement in 1Q, the performance fell short of consensus and our expectations

Q1 consolidated operating profit of Rs. 5,510 crore (down 10% q-o-q) was impacted by the inventory
write offs because of decrease in steel price and planned maintenance shutdown in India.

Steel Authority of India’s (SAIL) EBITDA, adjusted for rail price revision impact, surpassed consensus estimates mainly on lower cost.

A consensus sell is the analyst recommendation Steel Authority of India, from 23 analysts.

Steel Authority of India’s (SAIL) Q3FY23 performance was in line with consensus estimates. Key takeaways: 1) Sales volume growth was relatively muted (compared to peers) at 8.1% YoY as the company targeted domestic market; 2) it is operating at rated capacity of 19.5mtpa;

JSW Steel’s (JSTL) Q3FY23 EBITDA was in line with consensus estimates. Key takeaways: 1) Consolidated EBITDA surged 2.6x QoQ at Rs45.5bn (down 50% YoY) owing to lower cost at standalone operations; 2) performance of overseas subsidiaries, especially Italy, improved; 3) net debt rose by Rs35bn QoQ mainly due to adverse forex movement.

We visited JSW Steel’s Dolvi plant (Maharashtra) on Dec 16, 2022 and got insights on its sustainability initiatives, digitisation measures and key plant features.

Steel Authority of India’s (SAIL) Q2FY23 performance missed street estimate (of Rs12.4bn). Key takeaways: 1) Sales volume rose 34% QoQ at 4.21mnte as the company targeted domestic market.

JSW Steel’s (JSTL) Q2FY23 EBITDA missed consensus estimates by 62%.