JSW Steel profit tops expectations

JSW Steel, India's third-largest steel maker, beat consensus estimates on earnings in the June quarter and reported a consolidated net profit of Rs 656 crore against a loss of Rs 381 crore in the year-ago quarter. The company had reported a loss of Rs 381 crore in the same quarter last year due to an unusual depreciation of the rupee against the dollar, which led to a foreign exchange loss of Rs 862 crore. The firm has managed to beat earnings forecasts during the quarter on improved efficiencies, higher share of value-added and branded products.

During the quarter, the consolidated net sales (less excise duty) rose 29 per cent year-on-year (y-o-y) to Rs 13,067 crore. While net sales were lower than the estimated Rs 13,440 crore, the firm managed to surprise on all parameters at the operating level. According to Bloomberg estimates, JSW Steel was expected to report a consolidated net profit of Rs 477 crore. At the operating level, it reported earnings before interest, taxes, depreciation, and amortisation (Ebitda) of Rs 2,612 crore during the quarter, a y-o-y increase of 40 per cent.

"Apart from the higher contribution of value-added products, the boost in automobile and two-wheeler segments has pushed up the revenue stream y-o-y," said Seshagiri Rao, joint managing director and group chief finance officer, at the earnings conference on Friday. "Though the overall pricing remained soft during the quarter, realisations could be maintained because of a good value-added product mix."

STEELING UP
n JSW Steel managed to beat earnings forecasts during the quarter on improved efficiencies, higher share of value-added and branded products
n During the quarter, the consolidated net sales (less excise duty) rose 29% y-o-y to Rs 13,067 crore