Q1 Results: JSW Steel’s Profit Jumps Nearly Fourfold

JSW Steel Ltd.’s profit rose nearly fourfold in the quarter ended June on higher realisations and healthy volume growth.

Net profit jumped to Rs 2,366 crore from Rs 626 crore a year ago, according to the steelmaker’s exchange filings. That was higher than Rs 2,105 crore consensus estimate of analysts tracked by Bloomberg. The company’s volumes grew 11 percent to 3.76 million tonnes.

Revenue rose 36 percent on a yearly basis to Rs 20,519 crore, beating the estimated Rs 19,288 crore. Realisation per tonne increased 21.7 percent despite higher costs of key inputs like iron ore, coal, ferro-alloys and natural gas.

The steelmaker’s earnings before interest, tax, depreciation and amortisation nearly doubled to Rs 5,105 crore, while the operating margin increased from 17.3 percent to 24.8 percent.

Other Highlights

• The Ebitda/tonne stood at Rs 13,577.
• Net debt increased by Rs 1,070 crore during the quarter because of mark-to-market losses.

Domestic steel demand in first quarter grew at 9.2 percent year-on-year. Global steel demand is outpacing expected growth rates, said Seshagiri Rao, joint managing director and group CFO, JSW Steel said. While the demand is expected to remain robust, a surge in imports is a big concern for the industry, he added.

“As imports continue to increase and exports continue to decline, India turned a net importer of steel in first quarter after a gap of over three years,” said Rao told BloombergQuint in an interview.

Shares of the company closed 0.38 percent lower today at Rs 317 apiece. The stock gained 13.4 percent in the April-June period.

(Corrects an earlier version that stated the Ebitda/Tonne figure in crore)