JSW Steel's second quarter consolidated profit is likely to jump more than 6-fold year-on-year to Rs 750 crore but sequentially may fall 32 percent, according to analysts polled by CNBC-TV18. In Q2FY16, provision for diminution in value of investments hit profitability by Rs 116 crore.
Revenue is seen rising 15 percent year-on-year to Rs 12,500 crore in Q2. Excise duty of approx Rs 1,100-1,200 crore may be added to the topline which can make it look very good.
Operating profit may grow 64.8 percent year-on-year to Rs 2,850 crore and margin may expand 690 basis points to 22.8 percent in Q2 but margin may shrink 260 bps on sequential basis.
Topline may be driven by higher volumes-Domestic sales volumes are expected to grow 13 percent YoY and 8 percent QoQ to 3.60 MT-Blast furnaces ramp-up and decrease in imports-Capacity has been rammed up by 25 percent from 14.3 mtpa to 18 mtpa (Vijaynagar and Dolvi)
Performance will be impacted sequentially due to-Seasonally lower steel prices and an increase in cost of coking coal
Smaller segments need to be tracked:-Also watch out for JSW Steel coated products as it has been gradually improving-Also watch out for EBITDA loss in US plates and pipes business
Good operating performance partly offset by-Increased depreciation and interest costs
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