Motilal Oswal's research report on JSW Steel
JSTL posted revenue of INR470b in 4QFY23 (flat YoY), in line with our estimate of INR455b. ASP came in at INR71,917/t. EBITDA stood at INR79b (down 14% YoY), 11% above our estimate of INR72b. EBITDA was supported by higher volumes, better realizations and lower coking coal and energy costs. EBITDA/t stood at INR12,158 v/s our estimate of INR11,329. JSTL reported an APAT of INR37b (down 8% YoY), 26% above our estimate, driven by a better operating performance and a lower tax outgo. Sales volumes stood at 6.5mt (up 27% YoY), in line with our estimate of 6.4mt and aided by strong volumes in India operations. Revenue/EBITDA/APAT for FY23 stood at INR1,660b/INR185b/INR36b (up 13% YoY/down 53% YoY/down 83% YoY). Net debt stood at INR585b, with a net debt-to-EBITDA ratio of 3.2x. JSTL expects net debt to be in the same range in FY24 (INR30b of debt from JISPL will be added to JSTL’s consolidated balance sheet in FY24E).
We believe the current valuations at 6x FY24E EV/EBITDA and 2x FY24E P/B fully price in the above positive factors. We reiterate our Neutral rating on the stock with a revised TP of INR700.
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