JSW Steel shares in focus after Q1 profit more than doubles to Rs 2,209 crore. Should you invest?
ADVERTISEMENT Steel sales volume rose 9% YoY to 6.69 million tonnes at the consolidated level, while sales in India stood at 6.43 million tonnes, up from 5.9 million tonnes a year ago.
Revenue from operations remained flat at Rs 43,147 crore, while EBITDA surged 37% YoY to Rs 7,576 crore, led by higher volumes and lower coking coal costs. Total expenses declined to Rs 40,325 crore from Rs 41,715 crore last year. Ebitda margin for the quarter improved to 17.6%, up 473 basis points from the previous year. The company achieved an India Ebitda of Rs 11,658 per tonne, with an 18.5% margin.
JSW Steel incurred capex of Rs 3,400 crore in Q1 and plans to spend Rs 20,000 crore for the full year.Separately, the company is pursuing a review petition in the Supreme Court after its acquisition of Bhushan Power & Steel was deemed illegal. "We, along with our legal advisors, believe we have strong grounds to pursue the review petition," the company said.
ADVERTISEMENT Motilal Oswal has reiterated a 'Buy' rating on JSW Steel and raised its target price to Rs 1,200 from Rs 1,180. It said the operating performance was in line with expectations and highlighted healthy NSR, despite weak QoQ volume growth due to planned shutdowns at Dolvi and BPSL. Steel sales volumes rose 9% YoY but fell 11% QoQ.Ebitda stood at Rs 7,589 crore, up 38% YoY and 19% QoQ. Per-tonne Ebitda improved to Rs 11,324 in Q1FY26, a 26% YoY and 33% QoQ jump, beating the estimated Rs 10,440. Adjusted PAT stood at Rs 2,180 crore, up 159% YoY. Crude steel production rose 14% YoY to 7.26 million tonnes.
ADVERTISEMENT The brokerage expects double-digit revenue growth in FY26–FY27 on the back of capacity expansion and price recovery. Ebitda margin is projected to rebound to 18–19% over the same period, aided by domestic price recovery and safeguard duties.CLSA has maintained a 'Reduce' rating while raising its target price slightly to Rs 890 from Rs 880. It said Q1 was broadly in line but impacted by forex losses. CLSA added that Q2 guidance looks more positive but flagged project execution as a key monitorable. It remains cautious, citing underperformance amid stretched valuations.
ADVERTISEMENT Is RIL's strong profit growth sustainable amid rising capital expenditure?
Antique has maintained a 'Hold' rating on JSW Steel, raising the target price to Rs 942 from Rs 905. It expects domestic steel demand to remain resilient, supported by continued government capex and RBI rate cuts. FY26 should see further ramp-up of the JVML plant. Growth is also expected from BPSL's Phase 2 expansion and new iron ore mines in Karnataka and Goa. Antique has rolled over estimates to 1HFY28E, based on a 7.5x EV/EBITDA multiple.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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