JSW Steel Q1 Results Highlights: Net Profit Falls 64% to ₹867 Cr

For the June quarter, JSW Steel's revenue rose by 2% yoy to ₹42,943 crore. However, its net profit for the fiscal first quarter fell by 64% to ₹867 crore.

Quarter Results Highlights

•    Net profit dropped by 64% to ₹867 crore.
•    Revenue reached ₹42,943 cr from ₹42,213 cr in the same quarter last year.
•    Operating EBITDA stood at ₹5,510 crore with an EBITDA margin of 12.8% for the quarter.

In the first quarte, JSW Steel saw a sharp drop of 64% in its net profit which fell to ₹867 cr. This decline came despite the fact that raw material costs were lower. The drop in profit was mainly due to lower earnings from exports and tough competition from Chinese steel.

The company's revenue slightly increased to ₹42,943 crore from ₹42,213 crore a year earlier. However, this revenue was below the ₹44,651 crore that analysts had predicted. Compared to the previous quarter revenue dropped by 3.5% but it was 5.77% higher than the same period last year.

For the latest quarter, the company's EBITDA dropped by 22% yoy to ₹5,510 crore and its profit margins fell by 390 basis points to 12.8%. Crude steel production was 5.3 million tonnes which is a 3% decrease compared to last year and a 7% drop from the previous quarter. However steel sales went up by 3% yoy reaching 5.09 million tonnes.

Bhushan Power and Steel a subsidiary, produced 0.78 million tonnes of crude steel and sold 0.75 million tonnes.

The company's financial health showed a net debt to equity ratio of 0.97x at the end of June up from 0.93x in March. Net debt to EBITDA ratio also increased to 3x from 2.62x. By the end of June net debt was ₹80,199 crore rising by ₹6,283 crore since March due to spending on expansion projects and working capital.

Tax expenses for the quarter were ₹513 crore compared to ₹1,052 crore in the same period last year.

The domestic steel market has been flooded with excess supply because cheaper imports have become more popular and many mills completed maintenance work earlier than planned. This led to a buildup of unsold steel, as industrial buyers were able to purchase the commodity at lower prices.

JSW Steel Management Commentary

The company said, In the first quarter of FY25, India's steel exports dropped significantly down 51.1% from the previous quarter and 35.8% from the same quarter last year totaling 1.49 million tons. This means India continued to import more steel than it exported just like in FY24. The high volume of imports especially from China and countries with Free Trade Agreements is creating problems for the domestic steel industry.

About Company

JSW Steel focuses on making and selling iron and steel products. It's the main business of the larger JSW Group, which is worth $23 billion. The group also invests in various sectors, including energy, infrastructure, cement, paints, sports, and venture capital.

Prior to JSW Steel releasing its earnings report, the stock price fell approximately 5% to ₹887.90 per share on the NSE.

To Summarize

In the first quarter of FY25, JSW Steel's net profit fell 64% to ₹867 crore due to lower export earnings and competition from Chinese steel. Revenue rose slightly to ₹42,943 crore but missed analyst expectations. India's steel exports dropped significantly, leading to increased imports. JSW Steel's stock fell 5% to ₹887.90 per share before the earnings announcement.