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Target: ₹1,070
CMP: ₹915.15
JSW Steel posted a consolidated revenue of ₹46,300 crore (-2% y-o-y/ +10 per cent q-o-q ; in line) in Q4-FY24. ASP stood at ₹68,750/t (-4 per cent y-o-y/-2 per cent q-o-q) vs. our est. of ₹67,507/t.
Combined crude steel production was 6.79mt (+3 per cent y-o-y/-1 per cent q-o-q), while steel sales came in at 6.73mt (+3 per cent y-o-y/+12 per cent q-o-q) with capacity utilisation of 93 per cent at the Indian operations. JSTL India operations reported the highest ever VASP sales, up 5 per cent y-o-y (about 62 per cent share of total sales).
During FY24, revenue grew 5 per cent to ₹1,75,000 crore led by robust volume growth. EBITDA/APAT stood at ₹28200 crore/₹9,000 crore. Consolidated crude steel production and sales volume stood at 26.4mt and 25mt, respectively.
Going forward, we expect JSTL’s domestic volumes to be robust with increasing capacities, a better product mix, and export opportunities. Moreover, with stable pricing, softened coal costs, and improving operational efficiencies, we expect its EBITDA/t to improve going forward.
We raise our revenue/EBITDA estimates by 2/5 per cent for FY25 and 4/7 per cent for FY26. We upgrade JSTL to Buy from Neutral with a TP of ₹1,070 (premised on 7x FY26E EV/EBITDA).
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