JSW Steel stock in focus as steelmaker shares Q3 production data

Shares of JSW Steel Ltd will be in focus on Tuesday morning after the steelmaker said its consolidated crude steel production for the December quarter stood at 6.87 million tonnes, up 8 per cent sequentially and 12 per cent on year-on-year (YoY) basis. In a filing to BSE, JSW Steel said its capacity utilisation at Indian operations
level stood at 94 per cent for the December quarter. It said JSW Steel USA – Ohio reported better volumes on
improved demand, both on sequential and YoY basis.

On Monday, JSW Steel shares closed at Rs 822.15 on BSE, down 0.90 per cent. The stock is almost flat for the six month period. It gained 10 per cent in the last one year.

In its preview note, Motilal Oswal expects JSW Steel to report 328 per cent YoY rise in Q3 profit at Rs 2,101.40 crore on a 5.1 per cent YoY rise in revenue at Rs 41,138.90 crore. Ebitda is seen surging 44.9 per cent to Rs 6,589.90 crore. Prabhudas Lilladher, on the other hand, sees JSW Steel to clock 258 per cent surge in adjusted profit at Rs 1,760 crore. It sees revenue climbing 9 per cent to Rs 42,670 crore.

JSW Steel is seen posting a sequential fall in volumes for the December quarter, as Coal cost is expected to stay elevated. Motilal Oswal said the management commentaries on capex is important and the performance of domestic and overseas subsidiaries will be crucial.

"Expect 2 per cent QoQ improvement in NSR as steel prices had increased till end October; India volume to grow 3 per cent YoY to 5.1 mt; Ebitda/tonne to decline by Rs 1,600 QoQ to Rs11,200 on account of weak NSR, higher RM cost and lower operating leverage. Expect weak performance from overseas subsidiaries to continue," PL said.

For the steel sector as a whole, Motilal Oswal said: "We expect the steel sector to report mixed performance due to reduced seasonal demand and higher cost, resulting from an increase in iron ore and coal prices. However, it would be partially offset by an improvement in ASP. The impact on the volumes are due to weak export volumes in 3QFY24 and lower demand in the domestic market due to multiple long holidays," it said.

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