JSW Steel shares drop 3% post 64% YoY fall in Q1 profit. Should you still invest?
JSW Steel fell by 2.5% to its day’s low of Rs 866 in Monday's early trade on BSE after the company reported a 64% decline in its consolidated net profit at Rs 845 crore in the first quarter.
The profit missed the Street estimates of around Rs 1,254 crore. Revenue from operations in the June quarter, however, increased 2% year-on-year (YoY) to Rs 42,943 crore.
The crude steel production for the quarter stood at 5.3 million tonnes, lower by 3% YoY and 7% QoQ. Steel sales for the quarter increased 3% YoY to 5.09 million tonnes.
Here is what the brokerage firms say:
Citi: Sell| Target price: Rs 650
Citi has maintained a sell call on JSW Steel and cut its target price to Rs 650 from Rs 750.
The Q1 results were slightly ahead of Citi’s estimate, but pricing was under pressure (eyes on import parity). India steel prices have fallen with regional prices, which limits visibility on EBITDA/t expansion. The global brokerage firm also believes that the Investors may also be concerned with the transfer of under- construction slurry pipeline to JSW Infra.
Kotak Institutional Equities: Reduce| Target price: Rs 900
The domestic brokerage firm has maintained a reduce rating for the stock while cutting the target price to Rs 900 from an earlier Rs 940.
The company’s consolidated EBITDA in 1QFY25 missed KIE’s estimates, mainly due to the subdued performance of subsidiaries.
However, steel margins, on a standalone basis, were in line. Kotak Equities expects steel margins to remain under pressure in the near term, led by
