 "JSW Steel Q1 FY25 results: Net profit drops 63.9% to Rs 845 crore")
JSW Steel on Friday reported a 63.9 per cent year-on-year (Y-o-Y) decline in the consolidated net profit to Rs 845 crore for the June quarter of 2024-25 (Q1 FY25), on the back of lower sales volume and realisation. In the year-ago period, the company’s net profit had stood at Rs 2338 crore.
The Q1 FY25 net profit fell short of the Bloomberg consensus estimate of Rs 1280.2 crore.
JSW Steel’s total revenues on a consolidated basis in Q1 FY25 were at Rs 42,943 crore, 1.7 per cent higher than Rs 42,213 crore a year back. The Bloomberg estimate for revenue was Rs 42,333.7 crore.
Sequentially, revenue and net profit were down by 7.2 per cent and 34.9 per cent, respectively.
Planned shutdowns at the company’s Dolvi unit and Bhushan Power & Steel led to lower crude steel production.
Consolidated crude steel production for the quarter stood at 6.35 million tonnes (mt), lower by 1 per cent Y-o-Y and 6 per cent Q-o-Q. Capacity utilisation at the Indian operations was 87 per cent during the quarter.
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Steel realisations have been impacted by lower-cost imports. The company said that elevated imports, particularly from China and Free Trade Agreement (FTA) countries, pose a challenge to the domestic steel industry.
However, steel consumption in India has been growing, and the company expects the growth momentum in India to continue, driven by manufacturing, infrastructure development, and optimistic consumer sentiment.
JSW Steel's exports were 29 per cent lower Y-o-Y and constituted 10 per cent of sales from the Indian operations for Q1 FY25 compared to 15 per cent of sales in Q1 FY24.
In its statement, the company said that government capital expenditure (capex) was expected to recover in the coming quarters, supported by ‘robust tax revenues and higher Reserve Bank of India (RBI) dividend, providing fiscal flexibility’.
JSW’s consolidated capex spend during Q1 FY25 was Rs 4466 crore and the estimate for FY25 was Rs 20,000 crore.
The company said that net debt as of June 30, 2024, stood at Rs 80,199 crore, higher by Rs 6283 crore as of March 31, 2024, due to capex on ongoing expansion projects and investment in working capital.
At the board meeting held today, the company approved the transfer of the slurry pipeline being set up by JSW Utkal Steel, a wholly-owned subsidiary of JSW Steel, by way of a slump sale to JSW Infrastructure.