JSW Steel Ltd. share price target

JSW Steel Limited is engaged in the business of production and distribution of iron and steel products.

JSW Steel Ltd is the largest private sector steel manufacturer in terms of installed capacity. It is also one of the lowest cost steel producers in the world. It offers a wide range of steel products like Hot Rolled, Cold Rolled, Galvanized, Galvalume, Pre-painted Galvanised, Pre-painted Galvalume, TMT Rebars, Wire Rods & Special Steel Bars, Rounds &...

JSW Steel reported a mixed set of Q3FY20 numbers. On a standalone basis, the company reported sales volume of 4.0 million tonnes (MT) (higher than our estimate of 3.6 MT). During the quarter, JSW Steel was able to liquidate a large part of the inventory that was accumulated in H1FY20. Consolidated operating topline was at | 18055 crore (up 6% QoQ, down 11% YoY), higher than our estimate of | 16777.9 crore. On the back of lower-thanexpected realisations, standalone reported EBITDA/tonne was at | 6618/tonne (lower than our estimate of | 7500/tonne). Adjusted for onetime income, EBITDA/tonne was at | 5998/tonne. Standalone EBITDA was at | 2667 crore while consolidated EBITDA was at | 2451 crore (up 8% QoQ,...

Q2FY20) and exports accounted for 24% of shipments (31% in Q2FY20). The OPM decreased 860 bps to 13.6%. Thus the operating profit fell by 46% to Rs 2451 crore. Cost of material consumed as a percentage of adjusted net sales rose by 80 bps to 53.4%. Employee benefit expenses rose 110 bps to 4.1%. Power and fuel expenses remained flat at...

Earnings Marked by Weak Sales and Lower Realization

JSW Steel had reported a muted H1FY20 on the back of subdued demand from key user industries. While the management expects a pick-up in demand in H2FY20, it has also indicated that the volume lost in the first half are unlikely to be recouped during the second half. As a result, the company is now aiming to achieve ~97% of its erstwhile FY20 crude steel production and saleable steel sales volume guidance. For FY20E, in line with revised management guidance, we now model sales volume of 15.5 MT for current...

would be subdued and would remain significantly below 3-year average levels in the backdrop of weak demand, high uncertainty (due to trade wars) and sizeable overcapacity (both in global and domestic). To factor in lower steel prices and reduced volumes, we cut our EBITDA estimates for JSTL by 19%/18% for FY20E/FY21E. We maintain Reduce rating due to stretched valuations, weak earnings and overhang of Bhushan Power and Steel (BPSL)...

EBITDA was down 44% YoY (-27% QoQ) to INR27.3b (v/s est. of INR28.8b); PBT was down 77% YoY (-61% QoQ) to INR7b on lower margin. PAT was, however, up 20% YoY to INR25.6b (v/s est. INR6.0b) due to deferred tax write-back of INR22.1b. Standalone (S/A) volumes declined 9% YoY (-4% QoQ) to 3.6mt due to weak demand. Crude steel production also declined 8% YoY (-9% QoQ) to 3.84mt.

JSW Steel Limited is an integrated steel producer with manufacturing facilities in India with an Installed capacity of 18 MTPA. The company produces steel products including hot rolled coils, cold rolled coils, wire...

The consolidated net sales decreased by 3% to Rs 19812 crore for the quarter ended June 2019 compared to corresponding previous year period. The OPM decreased 610 bps to 18.8%. Thus the operating profit fell by 27% to Rs 3716 crore. Cost of material consumed as a percentage of adjusted net sales rose by 390 bps to 54.6%. Employee benefit expenses rose 110 bps to 3.6%. Power and fuel expenses rose 50 bps to 8.2%. Other expenses were up 100 bps at 15.7%. Other income rose 143% to Rs 141 crore in Q1FY'20 compared to Rs 58crore in Q1FY'19 while...