JSW Steel Q4 result beats estimates; stock gains

JSW Steel Ltd share price: Shares of JSW Steel (NSE: JSW Steel) climbed over 1 per cent on NSE on May 22, after the company posted its March quarter (Q4FY23) numbers. At closing, JSW Steel's scrip stood at Rs 702.7 on the NSE, up 1.28 per cent.

The earnings release showed that the steel manufacturing company registered an 11.9 per cent year-on-year (YoY) rise in consolidated net profit at Rs 3,741 crore for Q4FY23 against Rs 3,343 crore, registered in the year-ago period while the estimate was Rs 2,027 crore. The company’s revenue during the quarter under review surged 20.3 per cent to Rs 46,962 crore from Rs 46,895 crore in the corresponding quarter of the previous fiscal whereas the estimate was Rs 44,846 crore. JSW Steel’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) was down 14 per cent to Rs 7,939 crore as compared to Rs 9,184 crore a year ago (estimate was of Rs 6,424).

The company’s margin — a key measure of profitability for a business — declined to 16.9 per cent in the March quarter as compared to 19.6 per cent a year ago.

The board has recommended a dividend of Rs 3.40 per equity share of face value of Rs 1 each for the year ended March 31, 2023.

ICICI Securities has maintained a ‘hold’ call on NTPC for a target price of Rs 675 apiece. “The risk-reward in JSW Steel stock is balanced at this stage. On one hand, volume growth in FY24E/FY25E is likely to stay ahead of peers and, on the other, debt remains high and is unlikely to come off in light of the company’s capital commitments. That said, the stock price has corrected and is trading near its 10-year historical mean EV/EBITDA. We introduce FY25E numbers at this stage and roll over to FY25E valuations,” the brokerage said.

Brokerage firm Centrum has given a ‘sell’ call on JSW Steel for a target price of Rs 688 apiece. “Due to steep valuation, we downgrade JSTL to Sell rating with a target price of Rs 688 (earlier: Rs 667),” the brokerage said in its report.

JSW Steel's share price history

On a year-to-date (YTD) basis, JSW Steel stock has declined over 8 per cent as compared to Nifty50’s rise of 0.32 per cent. On a six-month basis, the stock has declined over 0.13 per cent against Nifty50’s rise of over 0.07 per cent.

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