PL First Cut - JSW Steel 1QFY24

PL First Cut – JSW Steel – *Tushar Chaudhari – Research Analyst, Prabhudas Lilladher Pvt Ltd*

JSW Steel (JSTL IN, CMP Rs 799, MCap Rs 1.95 tn, Unrated) 1QFY24 results first cut: Beats est.; lower RM and P&F costs aids EBITDA growth YoY; EBITDA/t up 19% YoY

• JSTL’s Standalone revenue declined 12% QoQ to Rs 328 bn. Average Realization grew 2% QoQ to Rs 66,513 (down 14% YoY) despite recent weakness in steel prices.

• Sales volume declined 13% QoQ to 4.93 mt (up 22% YoY).

• Standalone EBITDA declined 22% QoQ to Rs 48.6 bn (up 45% YoY on lower base & inline costs; better than est. of Rs 45b) on lower raw material and power & fuel cost.

• EBITDA per ton declined 10% QoQ to Rs 9,860.

• RM cost per ton was flat QoQ; P&F cost per ton increased 5% QoQ while Mining premium grew 22% QoQ to Rs 5927/t.

• Consolidated EBITDA declined 11% QoQ to Rs 70.4 bn (up 64% YoY; better than our est. of Rs 55 bn) on higher mining premiums and employee costs.

• On YoY basis lower power & fuel cost and lower RM cost are largely in-line. Increase in inventory drives the EBITDA beat on consolidated level.