JSW Steel Q3 profit jumps five-fold to ₹2,450 cr

The flagship business of the JSW Group, JSW Steel reported 392.9% year-on-year growth in its October to December quarter consolidated profit at ₹2,450 crore as compared to ₹490 crore profit in the third quarter of FY23, primarily driven by capacity utilisation in operations on the domestic front.

The company's revenue from operations surged 7.2% to ₹41,940 crore as compared to ₹39,134 crore during the year-ago period. The company's consolidated EBITDA came in at ₹7,180 crore for Q3 FY24, higher by 43% YoY, while the EBITDA margin for the quarter stood at 17.1% YoY.

JSW says its EBITDA was reduced by 9% QoQ, driven by lower sales volumes and higher iron ore and coking coal costs, which was partially offset by higher sales realisations from overseas operations.

The company's consolidated sales volumes for the said quarter stood at 6 million tonnes, lower by 5% QoQ but higher by 7% YoY. Domestic sales at 5.27 million tonnes were down by 4% QoQ and 2% YoY. "Retail sales were particularly impacted during the quarter on higher imports and channel destocking," the company says.

During Q3 FY24, India's finished steel consumption grew 12% YoY to 35.15 mt, while crude steel production grew 12.1% YoY to 35.98 mt. "A surge in imports, especially China, during the quarter, led to India remaining a net steel importer with imports growing 16.2% QoQ to 2.59 mt and exports falling 16.4% to 1.37 mt, which resulted in net imports increasing 108% QoQ," the company adds.

Among JSW's subsidiaries, Bhushan Power & Steel reported crude steel production of 0.86 million tonnes and a sales volume of 0.70 million. The company's revenue and EBITDA for the quarter stood at ₹5,030 crore and ₹780 crore, respectively. BPSL's profit for the quarter was ₹260 crore.

In its quarterly statement, JSW Steel says it is committed to achieving "net zero" carbon emissions by 2050. "We had committed to reduce carbon emission by 42% to 1.95t/tco2, and issued the global steel industry's first USD sustainability-linked bond in 2021 based on this target. The company is now extending its environmental responsibility with a commitment to achieving net zero by 2050."

In its outlook, JSW Steel says the global economy has been resilient despite elevated interest rates and multiple geopolitical events over the last couple of years. "The growth momentum for the Indian economy remains strong, driven by manufacturing and government spending on infrastructure."

JSW Steel share closed 0.78% up at ₹818.50 on the BSE today. The JSW Steel board, meanwhile, also approved the raising of long-term funds via the issuance of secured/un-secured, redeemable, non-convertible debentures worth ₹2,000 crore by way of private placement or public issuance.

India’s steel production and demand remained strong during the quarter, persistently resilient compared to the rest of the world, a scenario we have seen throughout the current calendar year. India emerged as the second largest steel producer in the world during April-November FY24 with domestic finished steel production reaching 89.7mt, an increase of 14.3% compared to the corresponding period last year (CPLY).