Jindal Steel and Power Q4 Review — Subdued Quarter; Volume Growth To Continue: Motilal Oswal

JSPL had a subdued fourth quarter; volume growth to continue: Motilal Oswal

<div class="paragraphs"><p>A snapshot of Jindal Steel and Power website.</p></div>
A snapshot of Jindal Steel and Power website.

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JSP reported a weak 4QFY22. A 4% Revenue miss translated into a ~20% EBITDA miss. The management had guided at a strong 4Q performance in its 3QFY22 earnings call, but stumped on delivery, citing various ‘one-offs’.

Consolidated revenue grew 21% YoY and 15% QoQ to INR143b in 4QFY22. The 4% miss was driven by a 6% lower than estimated ASP and a 2% beat on volumes. 

EBTIDA fell 42% YoY and 7% QoQ to INR31b, 19% below our estimate, driven by an 18% miss on standalone EBITDA. Other operating expenses, which include power and fuel costs, were the key drivers of the EBITDA miss. Lower than expected dispatches from captive coal mines in Australia and Mozambique led to higher fuel costs. 

Adjusted PAT fell 24% YoY, but grew 6% QoQ to INR19b. The 14% miss on our estimate was driven by an EBITDA miss, but was partly covered through lower than expected tax provisions. 

Revenue/EBITDA/PAT grew 32%/5%/39% YoY to INR511b/INR155b/ INR87b in FY22, driven by a mix of higher ASP and volumes.

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