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Informist, Friday, May 23, 2025

By Sunil Raghu

AHMEDABAD – Higher output and lower raw material costs helped JSW Steel Ltd. to report a double-digit year-on-year rise in consolidated net profit for the March quarter. This is the first time in five quarters that the company is posting a year-on-year growth in net profit.

The steel-maker posted a 16% year-on-year increase in its net profit for the March quarter at INR 15.03 billion. The net profit was, however, sharply lower than the analysts' estimate of INR 17.98 billion. This is the first time in four quarters that the company's bottom line has crossed INR 10 billion.

Sequentially, JSW Steel's net profit more than doubled due to lower coking coal prices and higher sales. The company had incurred a one-time expense of INR 1.03 billion due to the forfeiture of a bid security in the December quarter. During the December quarter, the Ministry of Coal terminated Banai and Bhalumuda coal blocks after the company decided not to develop them. 

The flagship company of the JSW group posted an 11% year-on-year and 12% sequential growth in its sales volume at 7.49 million tonnes in Jan-Mar. The crude steel production during the quarter was higher by 12% on year and 9% on quarter at 7.63 million tonnes. The company's revenue from operations fell 3% on year to INR 448.19 billion, a tad above the Street estimates. Sequentially, the revenue rose 8%. 

The company's total expenses fell 3.1% on year to INR 430.32 billion in the March quarter. The cost of raw materials consumed, including coking coal, fell 7.2% on year to INR 227.73 billion. The mining premium and royalties paid by the company declined 20.8% on year to INR 20.24 billion. The positive impact of lower coking coal prices was further buoyed by lower taxes the company paid in the March quarter. The company's tax expense for the March quarter came in at INR 2.29 billion, almost one-third the tax expenses in the year-ago quarter. 

Of the 7.49 million tonnes of steel sold in the March quarter, 6.72 million tonnes was by the Indian operations. The sales of Indian operations were 12% higher from quarter ago and 30% higher from a year ago. The institutional sales rose 11% on quarter and 33% on year, while retail sales grew 15% on quarter and 25% on year, the company said in a release.

For FY25, the company's crude steel production was at 27.79 million tonnes and steel sales were at 26.45 million tonnes. The average capacity utilisation of the company's Indian operations was 93% in the March quarter and 98% in FY25. For the current financial year, the company expects consolidated saleable steel sales at 29.20 million tonnes and crude steel production at 30.50 million tonnes.

JSW Steel's consolidated operating earnings before interest, tax, depreciation, and amortisation for the March quarter was INR 63.78 billion, in line with what the Street expectations. The EBITDA rose 14% on quarter, driven by higher sales and lower coking coal costs. The EBITDA margin of the company in March quarter came in at 14.2%. For the Indian operations, the company reported a 9% on-year rise in operating EBITDA to INR 64.36 billion with an EBITDA margin of 15.1% during the quarter.

For the full year, the company reported a consolidated net profit of INR 35.04 billion, down 60.2% from the previous year. The company's consolidated revenue during the year fell 3.5% to INR 1.69 trillion.

For FY25, the company spent INR 146.56 billion as capital expenditure, of which INR 37.19 billion was spent in the March quarter. The company had earlier guided for a capital expenditure of INR 160 billion to INR 170 billion for FY25. The company now expects its consolidated capital expenditure to rise to INR 200 billion in FY26.

JSW Steel's consolidated net debt fell to INR 765.63 billion as on Mar. 31, down by INR 43.58 billion from the previous quarter, led by healthy cash generation, release of working capital and calibrated capex, the company said. 

The company board approved raising up to INR 70 billion via non-convertible debentures with warrants and another INR 70 billion via qualified institutional Placement. The board also approved raising INR 50 billion via non-convertible debentures by way of private placement or public issuance in domestic markets.

The company also announced payment of a final dividend of INR 2.80 per share.

Friday, shares of JSW Steel closed at INR 1008.50 on the National Stock Exchange, up 0.3% from the previous close. The company announced the results after market hours. End

Edited by Saji George Titus

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