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View Promises →JSW Steel Limited — Q2 FY24
JSW Steel reported a strong Q2 FY24 with consolidated revenue of INR 44,584 crore and EBITDA of INR 7,886 crore, yielding an EBITDA margin of 17.7% and EBITDA per ton of INR 12,436.
bullish
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JSW Steel reported a strong Q2 FY24 with consolidated revenue of INR 44,584 crore and EBITDA of INR 7,886 crore, yielding an EBITDA margin of 17.7% and EBITDA per ton of INR 12,436. Performance was driven by robust domestic demand (14.8% growth in H1 steel consumption), a 62% share of value-added products, and inventory liquidation of 300,000 tons. The company is on track to reach 37 million tons capacity by FY25 and targets 50 million tons by 2030 via brownfield expansions. However, rising coking coal costs (expected $30/ton higher in Q3) and elevated imports pose near-term margin risks. Management expects Q3 domestic performance to remain stable, with price hikes partially offsetting cost increases.
जेएसडब्ल्यू स्टील ने दूसरी तिमाही में मजबूत प्रदर्शन किया। कंपनी की कुल कमाई 44,584 करोड़ रुपये रही और कमाई में से मुनाफा (EBITDA) 7,886 करोड़ रुपये था। मुनाफे की दर (EBITDA मार्जिन) 17.7% रही और हर टन स्टील पर 12,436 रुपये का मुनाफा हुआ। यह अच्छा प्रदर्शन देश में स्टील की मजबूत मांग (पहली छमाही में 14.8% बढ़ोतरी), 62% वैल्यू-एडेड उत्पादों की बिक्री और 3 लाख टन स्टॉक बेचने से हुआ। कंपनी 2025 तक 37 मिलियन टन और 2030 तक 50 मिलियन टन क्षमता बनाने की योजना पर काम कर रही है। लेकिन कोकिंग कोल की बढ़ती कीमत (अगली तिमाही में 30 डॉलर प्रति टन ज्यादा) और ज्यादा आयात से मुनाफे पर दबाव पड़ सकता है। कंपनी को उम्मीद है कि तीसरी तिमाही में देश में प्रदर्शन स्थिर रहेगा और कीमतें बढ़ाकर लागत का कुछ हिस्सा वसूला जा सकेगा।
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Rising coking coal costs impacting margins
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Crude steel production
6.34 million tons
+12% YoY
Consolidated group steel production grew 12% year-over-year to 6.34 million tons in Q2 FY24.
Domestic sales growth
18%
+18% YoY
Domestic sales in India grew 18% year-over-year, driving overall sales growth.
Value-added and special products share
62%
+15% QoQ
Share of value-added and special products increased to 62% of sales mix, up 15% quarter-over-quarter.
Net debt to EBITDA ratio
2.52x
-0.62x QoQ
Leverage ratio improved sharply to 2.52x from 3.14x in the previous quarter.
What Changed vs Last Quarter
NEW
CapEx of INR 52,000 crore until FY26
The company plans a CapEx of INR 52,000 crore until FY26 for growth to 37 million tons and downstream projects, funded mostly through internal accruals.
UPDATED
Production and sales guidance on track for FY24
Management confirmed they are on track to achieve their production and sales guidance for FY24, with better volumes in H2 driven by BPSL capacity expansion and improved utilization.
UPDATED
Capacity expansion to 37 million tons by FY25
JSW Steel is adding 8.5 million tons of capacity to reach 37 million tons by FY25, with brownfield expansions at Vizag (5 million tons) and BPSL (to 5 million tons) on track.
UPDATED
Coking coal cost expected to moderate
Management expects current elevated coking coal prices to moderate, with Q3 costs likely about $30/ton higher than Q2 due to blending benefits, and further moderation thereafter.
NEW RISK
Rising coking coal costs impacting margins
Coking coal prices have increased sharply, with Q3 costs expected to be about $30/ton higher, partly flowing into Q4 if prices persist, pressuring margins.
NEW RISK
Increased imports at predatory prices
Imports into India rose 23% YoY in H1, with some low-priced imports from trade flows potentially pressuring domestic prices and market share.
NEW RISK
Global steel demand weakness in overseas operations
Ohio operations continue to face weaker market conditions, impacting performance, though expected to improve slightly in Q3.
NEW RISK
Execution risk in capacity expansion
While expansions are on track, any delays in brownfield projects could impact volume growth and cost efficiency targets.
RISK GONE
Elevated Chinese steel exports
Higher Chinese exports due to weak domestic demand could pressure global steel prices and impact JSW's export realizations.
RISK GONE
Working capital outflow and debt levels
Working capital investment of ₹7,800 crore in Q1 increased net debt to ₹67,000 crore; reversal depends on inventory liquidation.
RISK GONE
US operations headwinds
Global headwinds may impact US operations, especially Ohio, though Baytown is expected to perform well.
RISK GONE
Iron ore price stickiness
Iron ore prices in India have not corrected in line with steel prices, potentially squeezing margins if correction is delayed.
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Guidance and risk preview
Management confirmed they are on track to achieve their production and sales guidance for FY24, with better volumes in H2 driven by BPSL capacity e...
Coking coal prices have increased sharply, with Q3 costs expected to be about $30/ton higher, partly flowing into Q4 if prices persist, pressuring...
View Risks →