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Centrum Report
JSW Steel Ltd. reported lower-than-expected consol Ebitda of Rs 55.1 billion (Our estimate: Rs 59 billion), down 10% QoQ. Standalone numbers came in-line, Ebitda of Rs 42.7 billion, down 3.7% QoQ (Our estimate: Rs 41.7 billion).
Export stood at 0.59 million tonne decrease QoQ significantly contributing 10% of sale in Q1 FY25 versus 20% in Q4 FY24. Coking coal cost decreased as guided by $ 23. Overall Ebitda/tonne came in-line at Rs 8,399 (Our estimate: Rs 8,355/tonne).
For Q2 FY25, coking coal cost is expected to decline by $ 23- 28/tonne. JSW is on verge of commissioning 5 millions of tonnes per annum and 1.5 millions of tonnes per annum capacity expansion at Vijaynagar and Bhushan Power and Steel Ltd. and expect to ramp up by December 2024.
We lower our realisation estimate by 3% leading to 16% fall in FY25E Ebitda. Hence we change our rating to Reduce (Earlier: 'Add') and our target price to Rs 895 (Earlier: Rs 909), valuing at seven times FY26E enterprise /Ebitda.
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