Q4FY22 Preview: JSW Steel: Revenues seen at Rs45,428 crore, PAT at Rs4,389 crore

26 May 2022 , 12:27 PM

Result date: 27^th May, 2022
Recommendation: Sell
Target price: Rs514
Source: IIFL Research

JSW Steel is likely to post a healthy performance for the March 2022 quarter relative to the year-ago quarter. This would be on account of continued traction in sales volumes. The company’s standalone sales volume could come in at 4.9 MT, up 20% over the year-ago quarter and 23% sequentially. Consequently, its consolidated sales could grow 69% over the year-ago quarter and 21% sequentially.

Consolidated EBITDA and EBITDA margin though are likely to be impacted by higher coking coal costs. JSW Steel’s standalone operations could report an EBITDA/tonne of Rs14,000/ton (versus Rs16,993/ton in December 2021 quarter and Rs19,756/ton in the year-ago quarter). Consolidated EBITDA margin is estimated at 19.0% versus 31.3% year-on-year and 24% sequentially.

Weakness in EBITDA could rub off on Profit After Tax (PAT) as well, which could remain flattish with 1% year-on-year growth.

Besides the results, company’s board will also consider and approve raising of long term funds on May 27^th.

Important management insights to watch out for:

• Outlook on growth of key business segments across markets
• Key margin drivers
• Details on fund raising plans

Rs Crore	March 2022 estimates	YoY change	QoQ change
Revenue	45,428	69%	21%
EBITDA	8,779	3%	(5)%
Profit After Tax	4,389	2%	(5)%

Source: Brokerage Reports