Q3FY23 Preview: JSW Steel: Sales seen at Rs421 billion, PAT at Rs14 billion

19 Jan 2023 , 11:49 AM

Result date: 20^th January, 2023

Recommendation: Reduce

Target price: Rs718

Source: IIFL Research

 

JSW Steel is likely to post volume decline of 20% on a sequential basis. Realizations, on the other hand, could increase by 6.6% sequentially to Rs75,090/t. Elevated costs of coking coal will put pressure on overall profitability of the company. Consequently, EBITDA per ton could reduce on a sequential basis.

In this scenario, the company’s revenue could remain flattish sequentially. 

As compared to net losses in the September 2022 quarter, the company is expected to post Profit After Tax (PAT) of Rs14 billion in the quarter.

Important management insights to watch out for:

• FY23 estimated production and sales 
• Plans to ramp up production of captive iron ore mines
• Management commentary on NSR and its impact on margins (if any) 
• Performance of overseas subsidiaries amid rising costs

Rs Million	December 2022 estimates	QoQ change
Sales	421	0.7%
EBITDA	48	171.4%
PAT	14	LTP

Source: Brokerage reports, LTP stands for loss to profit