JSW Steel Q3 preview: Profit, operating growth could be significant with around 18% rise in revenue

According to Kotak Institutional Equities, volume may increase 1 percent QoQ and decline 3 percent YoY during Q3FY21, on improved domestic demand post national lockdowns.

January 22, 2021 / 09:04 AM IST
 
 
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JSW Steel is expected to report significant year-on-year growth in the bottomline as well as operating earnings, with around 18 percent increase in revenue for the quarter ended December 2020, led by strong improvement in volumes and realisations.

"We forecast JSW's sales to increase 18.8 percent YoY led by a strong improvement in both, volumes and realisations. Its EBITDA is likely to increase 146.3 percent YoY. EBITDA margin is expected to improve 1,456bps YoY due to higher realizations," said IDBI Capital which expects 1,347.8 percent YoY increase in profit.

According to Kotak Institutional Equities, volume may increase 1 percent QoQ and decline 3 percent YoY during Q3FY21, on improved domestic demand post national lockdowns.

The brokerage estimates steel realization to increase by 15 percent QoQ (up 22 percent YoY) due to higher domestic volumes, lower exports and higher domestic prices.

"We estimate EBITDA per tonne to increase by 38 percent QoQ and 133 percent YoY," said Kotak which sees 18 percent YoY growth in topline, 161 percent increase in EBITDA, 1,508 bps margin expansion and 1,106 percent rise in profit YoY.

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Key things to watch out for would be volume guidance for FY22 and progress on Dolvi expansion (5 mtpa), IDBI said.

JSW Steel shares gained around 40 percent for the December quarter as well as full year 2020.
Moneycontrol News
first published: Jan 22, 2021 09:04 am

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