JSW Steel Q2 Results: Profit Falls 85% On Exceptional Item, Ebitda Meets Estimates
JSW Steel Ltd. announced a steep fall in its profit for the second quarter of fiscal 2025, missing analysts' estimates.
The steel producer reported a 85% fall in the consolidated profit at Rs 404 crore in the July-September quarter, compared to Rs 2,774 crore in the same period last year, according to an exchange filing on Friday. Analysts polled by Bloomberg had estimated a Rs 485-crore net profit.
However it is to be noted that the fall in net profit was due to an expectational item worth Rs 342 crore. This item is a provisional amount that JSW Steel set aside as it received approval for final mine closure and surrender of the Jajang Iron Ore Block. The provision amount pertains to the underlying carrying value of assets, inventory and site restoration liability.
JSW Steel Q2 FY25 Highlights
Revenues down 11% to Rs 39,684 crore (Bloomberg estimate: Rs 42,560 crore).
Ebitda down 31% to Rs 5,437 crore (Bloomberg estimate: Rs 5,051 crore)
Margins at 13.71% vs 17.7% (Bloomberg estimate: 11.90%).
Net profit down 85% to Rs 404 crore (Bloomberg Estimate: Rs 485 crore).
Key Highlights
The company's revenues were impacted mainly due to two factors:
Negative impact of lower steel prices during the quarter.
3% annual downtick in steel sales at 6.13 million tonnes.
The company's domestic sales were the highest in any quarter ever, up 5% sequentially to 5.57 million tonnes. Exports of the company's fell by 43% year on year due to elevated Chinese exports adversely affecting global markets.
While JSW Steel's operating Ebitda fell 31% annually to Rs 5,437 crore, the value beat Bloomberg consensus estimates. The fall in steel realisations was largely offset by lower costs. The Ebitda per tonne for the company stood at Rs 8,869, higher than brokerage estimates.
India Operations
Crude steel production at Indian operations stood 7% higher annually at 6.63 million tonnes, while exports were significantly lower.
Operating Ebitda of the Indian operations stood at Rs 5,491 crore, lower by 29% annually. Ebitda per tonne stood at Rs 9,266 per tonne.
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