JSW Group-backed steel major JSW Steel Ltd. shares opened in the green on Monday, May 26, after the firm reported its earnings show for the fourth quarter of FY2025.
JSW Steel reported a net profit of Rs 1,503 crore for the fourth quarter of FY25, marking a rise of around 16 percent on year from the Rs 1,299 crore net profit reported a year ago amid falling cost and improving margins.
Revenue from operations, however, fell around 3 percent on-year to Rs 44,819 crore during the March quarter, versus Rs 46,269 crore a year ago. Most steelmakers reported weakness in their quarterly topline owing to steel prices failing to gain momentum on weak demand and cheap imports from China and south-east Asia.
Operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the reporting quarter on a consolidated basis were Rs 6,378 crore, higher compared to Rs 6,124 crore in the same period a year ago.
The operating EBITDA margin for the quarter was 14.23 percent, higher than the 13.2 percent reported a year ago, as input costs showed a decline year-on-year, despite sluggishness in pricing.
Further, the management refrained from discussing the BPSL issue in detail, as it is evaluating the legal resources available to the ownership and control of the asset.
At 9.20 am, shares were quoting Rs 1,017.3, up 0.9 percent on the NSE, compared to the previous session's closing price.
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Motilal Oswal largely maintained its estimates, with a 'buy' call and target price of Rs 1,190 apiece. The brokerage said JSW Steel reported a decent performance in 4QFY25, supported by strong volume and deflated costs, offsetting the subdued realizations.
"We believe JSTL is well placed with new capacities coming on-stream, strong domestic demand, and a rising share of value-added proportion in the sales mix. Its focus on increasing the captive share of iron ore and improving coal linkages will support earnings."
JSW Steel reported consolidated Q4 EBITDA, which was marginally softer than expectations, with the positive effect of volume and cost offset by the negative effect of realizations, said Emkay Global.
"We expect a sequential price rise of Rs 3,200-3,250/t in Q1 alongside $10-15/t of benefit from coking coal cost, while iron ore cost is likely to be sequentially flat. FY26 volume guidance was softer than our expectations, resulting in earnings cut; retain 'add' with a target price of Rs 1,000," added the brokerage.
International brokerage Morgan Stanley noted that the metal player's standalone EBITDA came under its estimates, while the consolidated EBITDA topped expectations. Further, JSW Steel's overseas subsidiaries posted a weaker-than-expected performance. The brokerage maintained its equal-weight call, with a price target of Rs 1,000 per share.
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