JSW Steel Q4 Preview: Volume, Operating Income To Trend Upwards, Boosted By Safeguard Duty

India's largest private steel producer, JSW Steel Ltd., is set to announce its results for the final quarter of fiscal 2025 on Friday. Brokerages broadly expect a growth in volumes and earnings before interest, taxes, depreciation, and amortisation, and see the recently imposed safeguard duty on steel as a significant boost to the domestic steel industry.

The government had imposed a 12% temporary safeguard duty on certain steel imports to protect the domestic industry from cheap products being dumped from countries like China and Vietnam.

Industry steel production is expected to be muted during the quarter, said Morgan Stanley, though brokerages, at a bird's eye view, note the sector's healthy growth in the fiscal that passed.

As per Bloomberg estimates, JSW Steel's consolidated revenue for the March quarter is expected to rise 10% on a sequential basis to Rs 44,720 crore, compared to Rs 40,793 crore from the last quarter.

Ebitda is likely to grow 17% to Rs 6,548 crore from Rs 5,579 crore, while margin is expected to expand to 14.6% from 13.7% a quarter ago. Net profit is seen more than doubling to Rs 1,608 crore from Rs 789 crore.

• Revenue seen 9.6% higher at Rs 44,720 crore versus Rs 40,793 crore.

• Ebitda seen 17.4% higher at Rs 6,548 crore versus Rs 5,579 crore.

• Margin seen at 14.6% versus 13.7%.

• Profit seen at Rs 1,608.1 crore versus Rs 789.1 crore.

• Industry crude steel production is expected to be muted during the quarter.

• Domestic demand volumes are expected to be strong, supported by increased government spending during the quarter.

• Export volumes are likely to remain muted due to unfavourable pricing conditions.

• JSW's India volumes are projected to grow by around 10% yearly.

Three Case Scenarios:

• Bull case (10% probability): Improved global macroeconomic environment supports steel prices and volumes medium term.

• Base case (80% probability): Current expectations maintained.

• Bear case (10% probability): Unfavourable demand-supply dynamics and steel price outlook medium term.

Upside risks:

• Domestic demand and company volume growth exceed expectations, leading to higher steel prices.

• Faster ramp-up of projects.

Downside risks:

• Weaker-than-expected price or volume momentum.

• Delays in commissioning new capacity.

• Higher-than-expected iron ore costs from auctioned mines.

• While expected volume growth for ferrous players is modest at 3–6%, for JSW Steel, including the Vijayanagar expansion, volume growth is estimated at 9% on an annual basis.

• Companies focused on the local market, including JSW Steel, are expected to perform better.

• A marginal increase in realisations is anticipated, while coking coal costs are likely to decline by approximately $15 per tonne quarter-on-quarter.

• The volume ramp-up from the Vijayanagar facility is expected to be visible in the quarter.

• Ebitda per tonne is projected to expand by around Rs 700 sequentially.

• Overseas performance is also likely to improve.

• India's finished steel production and consumption showed healthy growth from April 2024 to February 2025, with production up 4% yearly at 122.8 million tonnes and consumption up 7% yearly at 125.6 MT.

• Given the current macroeconomic environment, especially post-Trump tariffs, the government of India is expected to be more proactive in protecting local steel producers.

• Investec retains JSW Steel as its preferred ferrous proxy, citing the company's strong positioning due to potential tariffs and favourable regulatory and legal developments.

• JSW Steel is part of Investec's Q-Alpha portfolio.

• CLSA expects the safeguard duty imposed by India to benefit JSW Steel the most among domestic steel producers.

• Ebitda for steel companies is anticipated to rise quarter-on-quarter.

• Domestic profitability for JSW Steel is projected to increase by approximately Rs 1,300 per tonne sequentially.

• Systematix Group expects primary steel producers under their coverage including JSW Steel to report an 8% year-on-year decline in revenue and a 12% yearly decline in Ebitda, mainly due to weaker performance in overseas operations.

• Despite the overall decline, Systematix prefers companies with better growth potential and strong industry tailwinds, with a preference for JSW Steel.

• Amid tariff disruptions, Indian steel companies have relatively better spot margin structures than non-ferrous peers, supported by the impending steel import duty.

• JM Financial estimates that spreads for Indian steel producers are likely to expand by approximately Rs 800 per tonne in the fourth quarter.

• Volumes are expected to trend upwards in the quarter under review due to seasonally strong demand.

• Blended realisations are projected to remain flat quarter-on-quarter at around Rs 56,800 per tonne.

• Standalone volumes for JSW Steel are expected to grow by about 2% quarterly to 5.7 million tonnes.

• Ebitda per tonne is estimated to increase by approximately Rs 440 sequentially to Rs 8,300 per tonne, despite a 6% quarterly decline.