JSW Steel, led by Sajjan Jindal, is expected to report a significant decline in net profit for the December quarter due to lower realisation. The fall in net profit is estimated to be in the range of 65-85 per cent, at around ₹300-760 crore on a year-on-year basis. Revenue is also expected to decrease, ranging from ₹41,700 crore to ₹38,500 crore, according to estimates from leading broking firms.
Kotak Institutional Equities predicts a 68 per cent decline in net profit to ₹762 crore year-on-year. The EBITDA is expected to fall by 25 per cent on a year-on-year basis.
In terms of volume, Kotak forecasts a 5 per cent increase in standalone volume to 5.46 million tonnes year-on-year. The brokerage expects steel realisations to decrease by 13 per cent year-on-year due to weak flat prices during the quarter.
The standalone EBITDA is likely to decrease by 23 per cent to ₹8,526 per tonne year-on-year, mainly driven by lower HRC realisations partially offset by lower coking coal costs. Kotak has a ‘Reduce’ rating on JSW Steel shares.
Nomura anticipates a lower volume in Q3 FY25, with the India business likely to report a sequential decline in EBITDA per tonne. The brokerage has lowered its 3Q FY25 consolidated EBITDA by 21 per cent primarily due to weaker-than-expected volumes and HRC prices.
Despite JSW Steel’s price hike in India in October, domestic HRC prices have declined, leading Nomura to revise its India realisation estimates down to ₹1,800 per tonne in Q3. Nomura maintains a ‘Buy’ rating for JSW Steel shares with a price target of ₹1,220.
Nuvama expects the highest fall in net profit among its peers. The Japanese brokerage Nomura has also lowered its 3Q FY25 consolidated EBITDA by 21 per cent due to weaker-than-expected volumes and HRC prices.
Revenue for the quarter is estimated to be ₹41,750 crore, with a 0.5 per cent year-on-year decline, according to Nuvama’s estimates. The brokerage expects net profit to fall by 87 per cent to ₹320 crore year-on-year.
In conclusion, JSW Steel is expected to report weak numbers for the December quarter, with lower realisation impacting its net profit and revenue. The company’s performance in terms of volume and EBITDA is also expected to decline compared to the previous year.
