JSW Steel Ltd. share price target

JSW Steel (JSTL) posted Q1FY21 standalone EBITDA below our expectation by 14% due to lower than expected margins. While, miss on consolidated EBITDA restricted to 6% due to lower than estimated losses in overseas operations and better earnings in domestic subsidiaries. Stock rallied by ~30% in last three months on the back of strong pent-up demand in China and rise in steel prices. We had seen similar trends in earlier...

25 July 2020 JSW Steels (JSTL) 1QFY21 results reflect the adverse impact of COVID-19 on steel demand and prices as consol. EBITDA declined 55% QoQ to INR13.4b. We expect an increase in domestic steel prices, supported by improving domestic demand and international prices which should improve margins in 2QFY21. EBITDA was down 64% YoY (+55% QoQ) to INR13.4b (v/s est. INR13.0b) on lower volumes and realizations. It reported loss of INR5.6b (v/s profit of INR10.4b in 4QFY20 and est.

18 July 2020 In FY20, JSTL ramped-up exports by 33% YoY to 3.2mt amid 10.7% YoY decline in domestic volumes (due to weak demand from auto and other flat steel consumers). JSTL expects share of exports to rise further to ~30% in FY21 as domestic demand is likely to be weak due to the disruption caused by COVID-19. Amid uncertainties arising from COVID-19, JSTL is focusing on cash conservation and has thus recalibrated its capex plans to prioritize return- accretive projects. FY21 capex has thus been curtailed to INR90b v/s the earlier planned spend of INR163b. JSW Steel Net debt (including acceptances) increased by INR64b YoY to INR639b in FY20 on weak domestic margins, significant losses in subsidiaries, and a higher capex spend. However, gross debt surged by INR121b to INR759b as JSTL increased liquidity in hand due to uncertainty in cash flows stemming from COVID-19. Net debt / EBITDA rose to 5.7x in FY20 (from 3.

Downward revise FY21E capex guidance to | 9000 crore JSW Steel has revised its FY21E capex plan to | 9000 crore (downward revised from earlier guidance of | 16340 crore). Priority is to complete key strategic projects during the year such as 5-10 MTPA capacity expansion at Dolvi, wire rod mill and pellet plant at Vijayanagar, selective downstream projects (like CRM1 upgradation at Vijayanagar) & commencement of iron ore mining from new mines in Odisha and Karnataka. For FY21, project...

JSW steel consolidated net sales decreased by 20% to Rs 17887 crore for the quarter ended Mar20 compared to corresponding previous year period. Consolidated saleable Steel sales for the quarter decreased 15% YoY and 9% QoQ to 3.65 million tonne given the impact of COVID19 related lock down in the latter half of March 2020. Domestic sales volumes grew by 3% QoQ....

We maintain our HOLD rating on the stock with a revised target price of Rs. 175 based on 6.5x FY22E EV/EBITDA. Topline remains under pressure due to weaker volumes JSW witnessed consolidated revenue declines of 20% YoY to Rs. 17,887cr in Q4FY20. Revenue was primarily impacted by weaker volumes with saleable steel sales falling 15% YoY to 3.65MT. Domestic sales declined by 5% YoY to 3.20MT (+3% QoQ), while export sales fell 51% YoY to 0.45MT and accounted 13% of total sales. Crude Steel production was down 5% YoY to 3.97MT. While domestic demand outlook continues...

JSW Steel (JSTL) posted Q4FY20 EBITDA below our estimates by 11% due to lower than expected earnings in domestic subsidiaries and higher intercompany eliminations. Impacted by tepid domestic demand and lower exports, sales volume fell 8% QoQ/14% YoY to 3.7mnt (PLe:3.75mnt). Realisations rose 8% or Rs2,880/t QoQ (down 10% or Rs4,310/t YoY) to Rs40,600 (PLe:Rs40,415). Cost/t remained flat QoQ to Rs32,585 (PLe:Rs32,600)/t. Hence, EBITDA/t came in line with our estimates at Rs8,700 (PLe:Rs8,500), up 45% QoQ/14% YoY. Management guided to maintain volumes in FY21e at 15mnt on expectation...

23 May 2020 JSW Steel (JSTL)s fourth-quarter result reflects the benefit of higher domestic steel prices. Derived realization improved by 7% QoQ to INR41,289/t, leading to a 45% QoQ increase in EBITDA to INR8,703/t. Rev/EBITDA/Adj PAT declined 20%/33%/32% YoY to INR179b/INR30b/INR10.4b respectively. We expect lower coking coal and domestic iron ore prices to cushion the fall in margins due to lower steel prices in FY21E and expect margins to decline 10% YoY in FY21E. Our FY21E/FY22E estimates remain broadly unchanged. INR30.3b) on lower margins and consol. PBT (before exceptional item) was Standalone (S/A) volumes declined 14% YoY (-8% QoQ) to 3.7mt due to COVID-19. Crude steel production declined 5% YoY (-1% QoQ) to 3.97mt. The share of exports declined to 13% v/s 24% in the previous quarter. INR41,500/t) on strong domestic prices and lower exports. EBITDA/t improved 45% QoQ (down 14% YoY) to INR8,703/t, led by higher realization.

Output falls in Q4; Outlook remains challenging JSW Steel Limited (JSW) is an integrated steel producer with manufacturing facilities in India. The company produces steel products including hot rolled...

Crude steel production volume declined 5.0% YoY to 4.02mt (+4.7% QoQ) as operations at Dolvi and Vijayanagar plants were impacted by the extended monsoons. Nonetheless, sales volume grew 11.0% YoY to 4.03mt (+13.2% QoQ) driven by significant improvement in domestic sales (+25.0% QoQ) which was led by Retail sales (+33.0% QoQ), OEM sales (+21.0% QoQ) and Automotive sales (+10.0% QoQ), partially offset by weaker exports (-13.0% QoQ). Following the prolonged inventory adjustment (destocking) in H1FY20, the company was able to liquidate a large portion of the...