JSW Steel Q2FY25 results: Net profit slumps 84% on lower sales realisation

Sequentially, profit down by 48% and revenue by 7.6%

JSW Steel on Friday reported an 84.1 per cent year-on-year (Y-o-Y) decline in consolidated net profit to Rs 439 crore for the July-September quarter (Q2FY25) on lower sales realisation due to cheap imports and an exceptional charge.

 

In the year-ago period, the flagship company of the Sajjan Jindal group had reported a net profit of Rs 2,760 crore.

 

Revenue from operations on a consolidated basis in Q2FY25 stood at Rs 39,684 crore, down 11 per cent Y-o-Y from Rs 44,584 crore a year ago.

 

Both revenue and net profit were lower than the Bloomberg consensus estimate. The estimate for revenue was Rs 42,559.6 crore and profit Rs 485.1 crore.

 

 

Sequentially, revenue was down by 7.6 per cent and net profit by 48 per cent. 

 

Steel sales for the quarter stood at 6.13 million tonnes (mt), lower by 3 per cent Y-o-Y. However, domestic sales at 5.57 mt were the highest in any quarter, up 1 per cent Y-o-Y on the back of the institutional segment; sales volumes to the institutional segment increased by 12 per cent Y-o-Y.

 

Sales to the retail segment fell by 14 per cent due to elevated imports. Exports at 0.39 million tonnes fell by 43 per cent Y-o-Y due to elevated Chinese exports adversely affecting global markets, the company said.

 

The profit was also impacted by an exceptional charge. The company had announced the surrender of the Jajang iron ore mine in Keonjhar district, in Odisha due to economically unviable operations. It recognised a net provision of Rs 342 crore pertaining to the underlying carrying value of the assets during the quarter.

 

Among the Indian subsidiaries, Bhushan Power & Steel reported a loss of Rs 93 crore for the quarter. JSW Steel Coated Products (consolidated) reported a net profit of Rs 57 crore for the quarter.

 

Lower sales realisation, however, impacted the EAF-based steel manufacturing facility in Ohio, USA. It recorded an Ebitda loss of $16.14 million for the quarter. The US plate pipe mill based in Texas reported an Ebitda of $5.04 million while Italy operations reported an Ebitda of euro 6.15 million ($6.6 million) for the quarter.

 

The company’s consolidated capex spend during Q2FY25 was Rs 3,384 crore, and the total spend for H1 was Rs 7,850 crore. However, the consolidated capex for FY25 was revised to Rs 16,000-17,000 crore against the earlier estimate of Rs 20,000 crore. The company attributed it to the transfer of the slurry pipeline project to JSW Infrastructure, and the rescheduling of the blast furnace -3 expansion at Vijaynagar to next year.

 

On the outlook, the company said that steel demand was expected to remain healthy in H2FY25. “The RBI’s shift in monetary policy stance to ‘neutral’ from ‘withdrawal of accommodation’ is a positive move, paving the way for potential policy easing,” it said, adding that the macroeconomic outlook remains strong. 

The company informed that the board has inducted Arun Sitaram Maheshwari as an additional director with effect from October 25 and also appointed him as a whole time director designated director (commercial & marketing) subject to approval from shareholders with effect from November 8.