JSW Steel Ltd. share price target

JSW Steel Limited has reported 56.9% decline in its consolidated pro?t at Rs. 10080 Mn in Q1FY20 as against Rs. 23390 Mn Q1FY19 and our estimate of Rs. 14804 Mn due to weaker demand and lower steel prices.

On the back of lower-than-expected sales volume in Q1FY20, we downward revise our sales volume estimate for FY20E and FY21E. For FY20E, we model sales volume of 15.75 MT for FY20E (downward revised from 16.0 MT...

Standalone (S/A) volumes declined 2% YoY (-13% QoQ) to 3.75mt due to weak demand. But, crude steel production rose 3% YoY (2% QoQ) to 4.2mt. Realization surprised positively, increasing ~INR741/t QoQ to INR46,664/t (v/s expectation of decline), as it benefited from carry-forward of higher priced export orders from 4QFY19 and favorable hedges. EBITDA/t declined INR183/t QoQ to INR9,936/t, impacted by negative operating leverage as volumes were lower QoQ. EBITDA of subsidiaries was down from ~INR1b in 4QFY19 to a loss of...

expectation. Domestic volumes fell 2% YoY to 3.75mnt (PLe:3.87mnt). Unitary EBITDA remained flat QoQ (down 21% YoY) to Rs9,936 (PLe:Rs9,935). Realisations rose 1.8% QoQ or Rs830 to Rs45,735 (PLe:Rs45,000). Industry continues to demand measures to curb imports despite reduction in...

JSW is among the lowest-cost global steel converters and is well positioned to benefit from the ongoing up-cycle in India steel. Therefore, we maintain BUY rating and value the stock at 6x FY21E EV/...

Robust Domestic Demand Driving Sales: JSW Steel Limited has reported positive set of consolidated operating numbers for Q4 and full year FY19.

JSW Steel reported a better-than-expected performance in Q4FY19 wherein topline, EBITDA and PAT came in higher than our estimate. Better-thanexpected sales volumes led to the beat. On a standalone basis, JSW Steel reported sales volume of 4.29 million tonnes (MT) (higher than our estimate of 4 MT). Consolidated sales volume was at 4.31 MT. Subsequently consolidated topline was at | 22368 crore (up 10% QoQ, 5% YoY, higher than our estimate of | 21048.5 crore). Standalone EBITDA/tonne was at | 10119/tonne (marginally higher than our estimate of | 10000/tonne in Q4FY19, | 12060/tonne in Q3FY19 and | 11950/tonne in Q4FY18)....

Correction in domestic steel prices and sharp increase in global iron ore prices (touched US$100/t) continue to remain a cause of concern for the steel sector however, we believe that domestic demand is expected to remain firm and oversupply situation in domestic iron ore industry will keep iron ore prices at low levels in FY20e. Management is confident to reduce cost through commissioning of Conveyor belt, securing iron ore mines and by implying other cost reduction measures. Notwithstanding with the recent correction in domestic steel prices, lower volume growth guidance (1.5% YoY...

Strong project pipeline provides comfort; Maintain Buy Consol. EBITDA of INR44.4b (-1% QoQ) in 4QFY19 was 10% ahead of our estimate, led by strong volumes and lower cost of production, partly offset by reduced realizations. This, along with other income (+43% QoQ), led to a 22% beat in consol. PAT (INR15.2b; -6% QoQ). Standalone volumes increased 17% QoQ to 4.29mt, led by exports (+1.6x...

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