JSW Steel Q1 Preview: Analysts See Margin Boost, But Caution On Near-Term Price Pressure

JSW Steel Ltd. is set to announce its financial results for the first quarter of the financial year ending March 2026 on Friday, with analysts expecting subdued performance amid weak client spending and macro uncertainties.

Steel companies are expected to report a sequential recovery in profit in the June quarter, driven by front-ended price hikes, lower coal costs, and improved realisations. The imposition of safeguard duties has supported domestic steel prices, contributing to an expansion in Ebitda margins across ferrous players.

However, the industry may be approaching a near-term margin peak due to seasonal demand weakness during the monsoon and persistent domestic oversupply. Currently, steel prices are already about Rs 800 per tonne below the previous quarter's average, which could limit further upside in profitability.

• Revenue seen 1% higher at Rs 42,790 crore versus Rs 42,337 crore

• Ebitda seen 31% higher at Rs 7,234 crore versus Rs 5,510 crore

• Ebitda margin seen at 16.9% versus 13%

• Profit seen at Rs 2,062 crore versus Rs 845 crore

• June quarter realisations are likely to rise by Rs 3,250 per tonne, notes Citi.

• The brokerage sees lower conversion costs at the new 5mtpa Vijayanagar BF, coming up to Rs 2,400 per tonne when fully ramped.

• It also notes lower coking coal costs in the quarter, but higher iron ore costs.

• Citi sees optimism already priced in.

• Elara Capital expects blended realisations for steel companies under its coverage to rise by Rs 1,000–3,880 per tonne sequentially in the quarter, driven by better pricing trends.

• JSW Steel, in particular, is projected to report volume growth in the range of 4%–20% annually.

• JPMorgan expects JSW Steel to post a 10% sequential rise in consolidated Ebitda in the June quarter, aided by volume expansion and strong domestic demand.

• The brokerage is of the view that India's steel consumption is accelerating, particularly from infrastructure projects.

• While near-term margin pressure remains due to limited price rebound, a gradual improvement in spreads and steady volume growth is expected to drive a high-teens Ebitda CAGR over FY24–27.

• Valuations, based on a seven times forward EV/Ebitda (above the 10-year average), are seen as attractive in light of the company's improving market share and ROE at healthy leverage levels.

Primary steel producers like JSW Steel are expected to report a 3% annual decline in revenue in the June quarter, largely due to lower steel prices, despite stable or rising volumes.

• BofA flags downside risks such as weaker steel prices or volumes, higher imports, and rising input costs.

• Potential upsides include stronger domestic demand, price hikes, higher import duties, or a recovery in Chinese steel demand.

• Kotak Institutional Equities expects JSW Steel to report standalone volumes of 5.2 million tonnes in the quarter under question, marking a 3% annual rise, but a 9.1% decline sequentially.

• Steel realisations are estimated to rise 4.2% quarterly, though still down 8.6% yearly, driven by improved pricing during the quarter. Standalone Ebitda per tonne is projected to increase to Rs 11,127 — up 27% sequentially and 33% annually — supported by lower coking coal costs and better realisations.