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Informist, Wednesday, Jul. 16, 2025

By Rajesh Gajra

NEW DELHI – The largest steel manufacturer in the country, JSW Steel Ltd., likely faced crosswinds in its top line performance for the June quarter. The company's sales volume would likely have moved up on a year-on-year basis, in sync with the already reported production volume for the June quarter. However, given that steel prices are lower than the same period last year, revenue growth is likely to be weak.

The company had said in a press release on Jul. 8 that its consolidated production volume rose 14% on year to 7.26 million tonnes in Apr-Jun. The sales volume growth may, however, be largely offset by a double-digit fall in sales realisation.

Sequentially, the production volume of JSW Steel declined 5% in the June quarter. The company said this was mainly due to planned maintenance shutdowns at some blast furnaces in the latest quarter. The sales realisation, however, would be better off sequentially due to a rise in steel prices in Apr-Jun compared to the March quarter, it said.

Input costs in the reporting quarter would likely have been in the company's favour both sequentially and on a year-on-year basis, leading to an increase in its operating profit. The bottom line growth will track the operating profit and will also be subject to any substantial movements in depreciation, interest costs, and tax outgo.

JSW Steel is likely to report a consolidated net profit of INR 19.98 billion for the June quarter, up 2.4 times on year and 33% on quarter, according to an average of estimates by 12 brokerages. JSW Steel's consolidated revenue from operations for the latest quarter is seen at INR 429.48 billion, flat on year and down 4.2% sequentially. The earnings before interest, tax, depreciation, and amortisation for the June quarter will likely be INR 73.06 billion, according to an average of estimates by 11 brokerages.

The net profit estimates range from a low of INR 16.48 billion by Kotak Securities' institutional equities division to a high of 23.93 billion by YES Securities (India). Among revenue estimates, the lowest is INR 396.90 billion by brokerage Prabhudas Lilladher, and the highest is INR 480.96 billion by JM Financial Institutional Securities.

In the March quarter, JSW Steel's consolidated net profit rose 16% on year to INR 15.03 billion, while the revenue from operations had declined 3.1% to INR 448.19 billion. Sequentially, the net profit had risen 2.1 times and the revenue had moved up 8.3%.

A rise in steel prices in the June quarter compared to the previous quarter will likely drive a 4.2% sequential increase in sales realisation for JSW Steel, according to analysts at the institutional equities division of Kotak Securities. The brokerage, however, estimates an 8.6% on-year fall in the company's sales realisation as steel prices were higher in the year-ago quarter.

The prices of both hot-rolled coil steel and long steel were up in the June quarter, Prabhudas Lilladher said. This will likely increase the net sales realisation of JSW Steel by around 5% sequentially, it added.

Analysts expect the company's EBITDA per tonne for the June quarter to be higher sequentially on the back of higher sales realisation and lower costs of coking coal, a major energy cost. But the benefit will be partly offset by an increase in costs of iron ore, a key raw material for steel manufacturers.

JSW Steel will announce its financial results for the June quarter on Friday. Investors' focus in the post-earnings announcement will be on the company's guidance on pricing, outlook and updates on subsidiary Bhushan Power and Steel Ltd.'s case in the Supreme Court, and management commentary on capital expenditure, brokerage Motilal Oswal Financial Services said.

JSW Steel has 10 'buy' recommendations from analysts at an average target price of INR 1,147, two 'hold' recommendations at an average target price of INR 1,014, and four 'sell' calls at a target price of INR 888.

At 0921 IST, shares of JSW Steel traded 1.14% lower at INR 1,023.20 on the National Stock Exchange. The company's shares have risen around 2.6% from the closing price of INR 1,008.50 on May 23 when the company had announced its March quarter earnings post-market hours.

Following are the June quarter consolidated earnings estimates for JSW Steel based on reports from 12 brokerage firms in descending order of estimate of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

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