JSW Steel's net profit for the December quarter was Rs 2,450 crore, marking a 12% QoQ decrease but a substantial increase from Rs 474 crore a year ago.
The revenue for the quarter reached Rs 41940 crore, with operating EBITDA at Rs 7180 crore, down 9% sequentially. This decline was attributed to lower sales volumes and increased costs of iron ore and coking coal, partially offset by higher EBITDA from overseas operations.
The company was expected to report a net profit of Rs 3,556 crore for the third quarter of FY24. Its net sales is projected at Rs 44,799.60 crore, down 18 percent QoQ and 13 percent YoY, according to estimates from seven analysts polled by Moneycontrol.
Standalone net profit of the firm surged 96% YoY to Rs 2416 crore, revenue increased 8% YoY to Rs 33310 crore, and operating EBITDA rose 43% YoY to Rs 5779 crore. Strong economic activity and government capex are fueling steel demand growth in India. However, the firm expresses concern about the increasing influx of steel imports into India, attributed to relatively weak global markets, as mentioned in an earnings release.
In the quarter, consolidated crude steel production reached 6.87 million tonnes, up 8% QoQ and 12% YoY, driven by increased capacity utilization at Indian operations. Steel sales were at 6 million tonnes, down 5% QoQ but up 7% YoY. Domestic sales were 5.27 million tonnes, down 4% QoQ and up 2% YoY. Net debt increased to Rs 79221 crore due to additional working capital investments.
The firm also said its board approved raising Rs 2000 crore via bonds for refinancing debt and capex. It also re-appointed Jayant Acharya as wholetime director.
In Q3, the firm reported capex of Rs 5103 crore in India and Rs 5253 crore consolidated. The anticipated consolidated capex for FY24 is now Rs 18000 crore, revised down from the earlier planned Rs 20000 crore.
The firm said construction activities for all packages in the 5 MTPA brownfield expansion at Vijaynagar are underway, with the Blast Furnace nearing completion in civil and structural work. The Phase II expansion at BPSL from 3.5 MTPA to 5 MTPA is progressing well, expected to be completed in FY24. JSW Steel Coated Products Ltd's 0.12 MTPA colour coated steel line in J&K is set to commence commissioning activities from Q1FY25.
The company said it prioritizes mainstreaming sustainability in its operations to create lasting value. With a strategic focus, it has committed to a 42% reduction in carbon emissions. In 2021, it pioneered the issuance of the global steel industry's first dollar sustainability linked bond aligned with this target. Expanding its environmental responsibility, the firm now aims to achieve net-zero emissions by 2050.
Subsidiary performance
Bhushan Power & Steel, the subsidiary, reported a profit of Rs 260 crore with revenue and operating EBITDA at Rs 5030 crore and Rs 780 crore, respectively. However, JSW Steel Coated Products recorded a loss of Rs 52 crore, with EBITDA per tonne declining on a QoQ basis primarily due to lower realizations. Revenue for JSW Steel Coated Products stood at Rs 7767 crore.
In the USA, JSW Steel's Ohio operations reported an EBITDA loss of $6.44 million, while its Italy operations reported an EBITDA of euro 16.7 million. Despite lower volumes QoQ, higher net realization contributed to increased EBITDA during the quarter.
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