JSW Steel profit nearly triples in Q1 on higher total income

JSW Steel, a prominent business entity within the diversified JSW Group, has reported an impressive three-fold increase in net profit for the June quarter of fiscal year 2023-24, reaching Rs 2,428 crore, primarily driven by jump in revenue. According to the regulatory filing, the company's net profit during the corresponding period of 2022-23 was Rs 839 crore.

JSW Steel’s revenue also experienced a significant upswing, reaching Rs 42,544 crore, compared to Rs 38,275 crore in the year-ago quarter.

Despite the surge in income, the company's expenses amounted to Rs 39,030 crore, as opposed to Rs 36,977 crore in the previous year.

EBITDA and financial position 

JSW Steel reported an operational EBITDA of Rs 7,046 crore with an EBITDA margin of 16.7 per cent. The company stated that lower sales volumes, higher iron ore costs, and marginally higher realizations due to increased export prices contributed to a QoQ decline in EBITDA.

The consolidated Net Gearing (Net Debt to Equity) stood at 0.96 times at the end of the quarter, compared to 0.89 times at the end of Q4 FY23. Net Debt to EBITDA was 3.14 times, with higher working capital being the primary factor in the Net Debt rising to Rs 66,797 crores.

Steel production and sales 

During Q1 FY24, JSW Steel's consolidated crude steel production reached 6.43 million tonnes, a notable 11 per cent year-on-year increase but a 2 per cent decline sequentially. The average capacity utilization for the quarter was 92 per cent, down from 96 per cent in the previous quarter due to scheduled shutdowns at its Indian facilities.

Steel sales for the quarter totalled 5.71 million tonnes, showing a significant 27 per cent year-on-year growth, but a 13 per cent quarter-on-quarter decline due to channel de-stocking. Additionally, exports were impacted by delayed loading caused by a cyclone that hit India's western coast towards the end of the quarter.

During Q1 FY24, the company spent Rs 4,094 crores on capital expenditures (capex), a fraction of the Rs 18,800 crores projected for the entire fiscal year.

"The 5 MTPA brownfield expansion at Vijayanagar is progressing well, with civil works underway at the site. The construction activities of all packages are currently underway, and equipment erection has commenced. The project is expected to be completed by the end of FY24," the company said in its filing.

"JSW Steel Coated Products Limited has commissioned the colour-coated steel line of 0.25 MTPA at Rajpura in May. The colour-coated steel line of 0.12 MTPA in Jammu and Kashmir is expected to be completed in Q4 FY24," the filing explained.

In addition to its strong financial performance, JSW Steel announced the appointment of Swayam Saurabh as Chief Financial Officer designate during the board meeting held on Friday.

(With PTI Inputs)