JSW Steel Q2 results preview: PAT may decline by 71-80% YoY, revenue fall likely by up to 8.5%

On the profit after tax (PAT) front, the Nifty company could report a fall of 71-80% on a YoY basis in Q2FY25. The net profit is in the range of Rs 200 crore and Rs 659 crore.

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JM Financial remains most bullish on JSW Steel’s July-September quarter revenue while Nuvama Institutional Equities has the most conservative estimates. Nuvama also has the lowest PAT estimates for the company, estimating its adjusted net profit numbers at Rs 200 crore. Kotak Institutional Equities pegs highest estimates among its peers whose views have been taken into account.JSW Steel is likely to report a drop in its revenue and sales on a sequential basis as well, the estimates said.

The company will announce its Q2FY25 earnings on Friday, October 25.

Here’s what brokerages recommended:

JM Financial

JM FInancial has estimated JSW Steel’s July-September quarter net sales at Rs 43,700 crore, which could be lower by 1.9% on a YoY basis and 1.8% on a QoQ basis. The net profit for the reporting period is said to go down by 71% YoY and 25% QoQ to Rs 600 crore.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) is pegged at Rs 5,000 crore, which could go down by 37% on a YoY basis and 10% on a QoQ basis.

“We estimate blended realisations to decline by Rs 3,500/ ton QoQ led by decline in flat and long product prices. Standalone volumes are expected to grow by 2% QoQ to 5.2 million tons. We estimate EBITDA/ton to decline by Rs 1,100 to Rs 7,300 (-13% QoQ),” JM said in its preview note.

Kotak Equities

Kotak Institutional Equities expects the Nifty company to post net sales numbers around Rs 42,113 crore which are a 5.5% YoY and 1.9% QoQ climbdown. PAT is expected to fall 76% over Q2FY24 and 22% over Q1FY25 to Rs 659 crore.

EBITDA for the reporting quarter is seen at Rs 5,108 crore, which is a likely 35.2% YoY fall while a 7.3% sequential decline.

EBITDA margin is estimated at 12.1% for Q2FY25, which may fall by 556 bps YoY and -71 bps QoQ.

“We expect JSTL to report a standalone volume of 5.2 million tons (-3% YoY, +3.1% QoQ). We estimate steel realisations to decrease by 4.9% QoQ (-2.2% YoY) on account of weak regional prices,” Kotak said in its Q2 review note.

“We estimate standalone EBITDA/ton to decrease sequentially to Rs 7,448/ton (-42% YoY, -11% QoQ) led mainly by lower realisations,” the brokerage note said further.

Yes Securities

Yes has estimated revenue at Rs 40,808 crore, an 8.5% YoY and 5% QoQ fall. PAT is estimated at Rs 546 crore, which could come down by 80.2% over Q2FY24 and 35.4% over Q1FY25.

EBITDA could be reported at Rs 45,993, declining by 41.7% on YoY basis and 16.5% on a QoQ basis.

Revenue fall could be attributed primarily due to a fall in the realisations for both flats and longs.

We expect JSTL to report an EBITDA margin of 11.3% on a consolidated basis,” this brokerage said.

Nuvama

Nuvama has estimated net sales numbers at Rs 40,010, which could be a 6.8% fall on a YoY basis and 10.3% decline on a QoQ basis. The adjusted PAT could hover around Rs 200 crore, seeing a 76% YoY fall and 91% QoQ fall.

“Expect EBITDA/t of Rs 7,077, down Rs 1,322 QoQ, owing to lower steel prices (down Rs 3,500/t QoQ), partly offset by lower coking coal prices. Volume to increase by 2% QoQ to 5.19mt,” Nuvam said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)