JSW Steel Ltd. share price target

ICICI Securities Ltd | Retail Equity Research In pursuit of inorganic growth, JSW Steel has stepped into the global market with the acquisition of Aferpi (Italy) and Acero Junction (US). On the organic front, the company is expanding its plate and pipe mill in the US. JSW Steel has chalked out a considerable investment of $1 billion in...

JSW Steel reported stellar Q4FY18 numbers. Sales volume for the quarter was at 4.22 million tonnes (MT), up 7% YoY, 6% QoQ, higher than our estimate of 4.0 MT. Consolidated topline for the quarter was at | 20817 crore (up 25% YoY, 17% QoQ) significantly higher than our estimate of | 18820.6 crore primarily due to healthy realisations Standalone operations posted a robust EBITDA/tonne of | 11950/tonne significantly higher than our estimate of | 10000/tonne (Q3FY18: | 9000/tonne, Q4FY17: | 7586/tonne, Adjusted...

Revenue increased by 13.35% to Rs. 20027.0 Cr in Q4FY18 when compared to the previous quarter. JSW Steel Ltd Q4FY18 results Comment

JSW Steel (JSTL) delivered very strong performance driven by sharp expansion in spreads and improving domestic demand. Consolidated EBITDA increased 28% QoQ / 56% YoY to INR49.2b (14% ahead of est.). Adj. PAT increased 46% QoQ to INR26.7b (est. INR17b). PAT is adjusted for GST gains and deferred tax asset in US, together totaling INR10.9b.

Headline numbers are better than estimates, primarily on account of higher-thanexpected realization of Rs46,680/tonne, up 18% yoy (13% qoq) supported by higher domestic sales. Export Sales proportion reduced to 15% (vs 30% in Q3FY18). Consequently; EBITDA/tn rises by 58%yoy to Rs11950/tn (+33%qoq). Coated products...

JSW, part of the USD8bn O.P. Jindal Group, was incorporated as Jindal Vijaynagar Steel JVSL). It began operations in 1999 with the commissioning...

The crude steel production was 0.41 cr tonnes, which is 7% growth YoY and a 4% growth sequentially Sales volume was 0.39 cr tonnes on standalone basis, which is a 9% growth YoY and 1% sequentially and on consolidated basis the volume was 0.40 Cr tonnes, which is 12% growth YoY...

JSW Steel reported highest-ever quarterly EBITDA of Rs 38 bn in Q3FY18 mainly on higher steel realization. Consolidated EBITDA/ton was Rs 9,700 vs. Rs 7,880 YoY. Q3 was a strong beat to our and consensus estimates. JSW Steel remains one of our top picks in the sector.

JSW Steel Ltd Q3FY18 results comment Revenue increased by 6.2% to Rs. 17669.0 Cr in Q3FY18 when compared to the previous quarter. Also, it grew by 28.07% when compared with Q3FY17

JSW Steel reported a healthy Q3FY18. The performance was driven by healthy realisations and above our estimates on all fronts. Sales volume for the quarter was at 3.97 million tonnes (MT), up 10.3% YoY, 1.8% QoQ, in line with our estimate of 3.95 MT. Consolidated topline for the quarter was at | 17861 crore (up 27.5% YoY, 6.2% QoQ) higher than our estimate of | 16982.2 crore Standalone operations reported a strong EBITDA/tonne of | 9000/tonne, higher than our estimate of | 8500/tonne (Q2FY18:...

Standalone sales increased 1% QoQ to 3.97mt. Share of exports increased 6ppQoQ to 30%. EBITDA/t increased by INR1,533 to INR9,000, primarily led by an increase in average realization. JSW Coated's margins have been facing headwinds from pressure exerted by imports. Capacity utilization and EBITDA at the US mills are gradually improving. Salav's operating performance too is stable. Net debt (incl. acceptances) declined INR11.6b QoQ to INR514b. Capex is likely to be at INR60b in FY18, 25% lower than the earlier guidance. The margin outlook for 4QFY18 is stable at current levels, as there is sufficient steel price increase to offset cost pressure from iron ore and coking coal.

Captive iron ore mines to reduce cost: JSW has won 5 iron ore mines in category C auctions, which can produce about 5 mnt of iron ore. Currently, the company has applied in Supreme Court for removal of 30 mnt cap on Karnataka iron ore production.

Rich valuations shape our NEUTRAL rating (TP Rs 242, 7.0x Sep-19 EV/EBITDA) JSW Steels (JSTL) standalone numbers missed estimates (EBITDA/t: Rs 7,467, (19.5)/18.9% YoY/QoQ), Est 7,924) on weaker realisations (Rs 37,806/t, 16.9/(3.5)% YoY/QoQ, Est Rs 39,029). Volumes continued to be strong (3.92 mT, 12.0% YoY), as JSTL sold from its inventory, offsetting flattish production volumes.

JSW Steel (JSTL) has delivered an in-line performance in 2QFY18 with its standalone sales volume increasing by 2% YoY and 11.7% QoQ to 3.92mnT vs. our estimate of 3.95 mnT. Notably, JSTL recorded the highest 2Q sales volume. However, NSR fell by 3.2% QoQ to Rs38,153/tonne vs. our estimate of Rs40,879/tonne, which the Management attributed to lower realisation in coated business led by pressure from cheaper imports. EBITDA surged by 33.2% QoQ (+7.7% YoY) to Rs29.3bn vs. our estimate of Rs29.6bn, while EBITDA/tonne grew by a healthy 19.2% QoQ (+5.5% YoY) to Rs7,467 vs. our estimate Rs7,500. EBITDA margin expanded by 369bps QoQ (-264bps YoY) to 19.6% owing to lower overall operational cost especially on raw material...

For Q2FY18, JSW Steel reported a subdued performance on the operational front. The topline was above our estimates on account of higher sales volume while profitability was below our estimates. Standalone operations reported a muted EBIDTA/tonne on account of lower-than-anticipated sales realisations Sales volume for the quarter came in at 3.92 million tonnes (MT), up 2.1% YoY, 11.7% QoQ, higher than our estimate of 3.6 MT. The consolidated topline for the quarter was at | 16818 crore (up 27.1%...

Iron ore mining and logistics benefits ahead JSW Steel's (JSTL) 2QFY18 consol. EBITDA grew 16% QoQ/3% YoY to INR30.4b (6% miss). Standalone EBITDA per ton grew 19% QoQ to INR7,467 (est. of INR7,655). Consol. PAT grew 34% QoQ/15% YoY to INR8.4b (est. of INR11.6b, miss due to a higher tax rate). Net debt (incl. acceptances) increased by INR10b to INR526b. Sales grew 12% QoQ to 3.92mt on destocking after the build-up due to GST in 1Q. Production was muted with just 1% QoQ increase to 3.94mt due to iron ore and water shortages. These issues are now behind....

Q1FY18 consolidated EBITDA was down 20% YoY at Rs 26 bn, in line with our estimate but marginally higher than consensus. EBITDA decline was mainly due to (1) subdued domestic sales due to industry-wide destocking on GST implementation and (2) YoY higher raw material cost.

We will largely maintain our estimates and recommendations (NEUTRAL with a TP of Rs 236 based on 7x June 19 EBITDA). JSW Steels (JSTL) standalone numbers missed estimates (EBITDA/t: Rs 5,917/t, -33.8% YoY, -15.0% QoQ, Est 6,728) on weaker sales volumes (3.5 mT, 4.8% YoY, -11.6% QoQ, Est 3.9 mT). Realisations beat estimates (Rs 39,171, 21.1% YoY, flat QoQ, Es Rs 38,100), driven by lower exports (23% vs est 30%) in the mix (Export prices fell more than domestic). Subsidiaries delivered strong numbers (Coated products EBITDA up 30.3/27.0% YoY/QoQ, US/Chile +ve EBITDA from losses earlier), and this drove a smaller miss on consolidated EBITDA (Rs 26.2bn, -20.0% YoY, -17.3% QoQ, Est Rs 27.8bn).

We expect JSTL's margins to inch up, going forward as the steel prices continue to remain strong in global steel markets driven by a surprise demand spurt in China. Moreover, the steel demand in domestic markets appears to be strong, which would drive the domestic steel prices further. Despite these positives, the valuations seem to be prohibitive especially following the sharp run-up in the stock price. However, we believe that JSTL continues to be the best bet on domestic steel space due to efficient operations and lean cost structure. Thus, we...

topline for the quarter was at | 15977 crore. After adjusting for excise duty, net operating income (consolidated) was at | 14699 crore (up Quarterly Performance (Consolidated)...