Q2 Results: JSW Steel’s Profit More Than Doubles

JSW Steel Ltd.’s profit more than doubled in the July-September quarter meeting estimates.

Net profit surged 153 percent year-on-year to Rs 2,126 crore in the second quarter, according to its exchange filing. That compares with Rs 2,025 crore estimate of analysts tracked by Bloomberg.

The steelmaker’s revenue rose 25 percent over the year-ago period to Rs 21,552 crore, beating the Rs 20,390-crore estimate. Volumes, however, fell 1.3 percent year-on-year to 3.91 million tonnes.

Ebitda per tonne rose 63.6 percent on a yearly basis to Rs 12,547. Realisation per tonne rose 26 percent to Rs 55,120.

“An improved product mix and supportive domestic prices aided the realisation growth and, in turn, the ebitda per tonne,” according to IIFL Securities’ Noel Vaz. In addition, steel prices rose 25 percent year-on-year, he said.

Earnings before interest, tax, depreciation and amortisation rose 61.6 percent to Rs 4,906 crore despite higher costs of key inputs like iron ore, coal, ferro-alloys and natural gas. Its operating margin expanded 520 basis points to 22.8 percent.

For the first half, the company said it reported its highest Ebitda of Rs 10,011 crore.

Domestic sales volume, however, grew 11 percent year-on-year during the quarter. The demand came from original equipment manufacturers and favourable international markets, according to its exchange filing.

The Sajjan Jindal-owned company approved a rights issue of up to Rs 5,000 crore, the company said in its press release. It also approved the merger of its wholly owned subsidiaries—Dolvi Minerals and Metals Private Ltd., Dolvi Coke Projects Ltd., JSW Steel Processing Centres Ltd., and JSW Steel (Salav) Ltd.—with JSW Steel.

Shares of the steelmaker ended 0.6 percent higher ahead of its earnings announcement compared with a 0.98 percent fall in the in the benchmark Nifty 50.