JSW Steel Limited: Quarterly Result Update
JSW Steel Limited: Quarterly Result Update
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Subsidiaries performance:
JSW Steel Coated Products (Consolidated): During the quarter, JSW Steel Coated
Products, including its subsidiaries, registered a production volume (GI/GL, Tin, CRCA & other
saleable products) of 1.07 million tonnes and sales volume of 1.09 million tonnes. Revenue from
Operations for the quarter stood at Rs 8,965 crore, and EBITDA was Rs 411 crore. The EBITDA
per tonne is marginally lower on QoQ basis mainly due to lower export realisations. The
subsidiary reported a Profit after Tax of Rs 113 crore for the quarter.
Bhushan Power & Steel Ltd (BPSL): During the quarter, BPSL registered Crude Steel
Production of 0.77 million tonnes and Sales volume of 0.80 million tonnes. Revenue from
Operations and Operating EBITDA for the quarter stood at Rs 5,817 crore and 745 crore,
respectively. BPSL reported a Profit after Tax of Rs 210 crore for the quarter.
JSW Steel USA Ohio Inc.: The EAF-based steel manufacturing facility in Ohio, USA, produced
1,51,313 net tonnes of Slabs during the quarter. Sales volumes for the quarter stood at 59,136
net tonnes of HRC and 1,16,091 net tonnes of Slabs. It reported a EBITDA loss of US$29.4
million for the quarter. Lower volumes due to adverse market conditions in the US, as well as
lower steel prices impacted performance during the quarter.
US Plate and Pipe Mill: The Plate & Pipe Mill based in Texas, USA produced 88,090 net tonnes of
Plates and 5,052 net tonnes of Pipes, reporting a capacity utilization of 37% and 4%,
respectively, during the quarter. Sales volumes for the quarter stood at 92,423 net tonnes of
Plates and 6,335 net tonnes of Pipes. It reported an EBITDA of US$ 25.96 million.
JSW Steel (Italy) S.r.l. (Aferpi): The Italy based Rolled long products manufacturing facility
produced 61,520 tonnes and sold 78,651 tonnes of rolled products during the quarter. It
reported an EBITDA of Euro 8.9 million for the quarter. While volumes were higher 000, lower
net realisations impacted EBITDA performance during the quarter.
Update on Projects:
• The 5 MTPA brownfield expansion at Vijayanagar is progressing well, with civil works
underway at the site. The construction activities of all packages are currently underway
and equipment erection has commenced. Erection of one Convertor has been completed in
the Steel Melt Shop. The project is expected to be completed by end of Fy24.
• At JSW Steel Coated Products Limited, the colour coated steel line of 0.12 MTPA in Jammu
and Kashmir is expected to be completed in Q4 FY24.
• The Phase-II expansion (from 3.5 MTPA to 5 MTPA) at BPSL is progressing well and is
expected to be completed by the end of FY24.
• The Company`s capex spend during Q2 FY24 in India was Rs 3,701 crore and consolidated
was Rs 3,816 crore. During H1 FY24 capex spend in India was Rs 7,795 crore and
consolidated was Rs 7,996 crore, against the planned capex spend of Rs 18,800 crore in
India and Rs 20,000 crore consolidated for FY24.
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Additionally, recent geopolitical developments in the Middle East are a concern.
In the US, healthy services sector and strong labour markets are supporting economic growth.
However, the Feds higher for longer stance to control sticky inflation implies elevated rates are
likely to sustain. This could result in a slowdown from the end of CY23. In Europe, growth has
weakened on elevated interest rates and a global slowdown that has affected exports.
Moderating inflation and improvement in global demand will be triggers for recovery.
In China, economic activity had slowed down in early 2023 post the Covid re-opening, and there
has been continued weakness in the property sector. However, China`s strong Q3 CY23 GDP
print of 4.9% along with other economic indicators such as retail sales, industrial production,
services, etc demonstrates positive momentum on the back of targeted policy actions. Further
policy measures could add more legs to the recovery.
In Japan, healthy wage hikes are supporting consumption growth, while manufacturing is
slowing. A prolonged global slowdown is negative for Japanese exports despite the weakness in
the Yen. Amidst a slowing global economy, India remains a bright spot with healthy economic
momentum driven by both manufacturing and services. The government`s thrust on
infrastructure (spends up 48% YoY FYTD August) and positive consumer sentiment are driving
investments. Strong traction in Infrastructure, energy transition, defence and PLI scheme are
driving capex. There is strong interest from global investors and corporates to participate in the
long-term India growth story.
Healthy tax collections on the back of strong economic activity gives the government capacity
for investments and other spending. The festive season demand is shaping up well with healthy
growth in consumption. Auto and residential real estate sectors are witnessing robust demand
growth. Green shoots are visible in the rural economy, with positive traction in 2W demand and
FMCG sales, even as the effects of an uneven monsoon remain a monitorable. Evolving
geopolitics, higher energy prices and a severe global slowdown are key risks to India`s
economic growth momentum in the near term.
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