JSW Steel (JSWSTEEL) Q2 24/25 earnings summary

Executive summary

• Consolidated revenue for Q2 FY25 was ₹39,684 crore, with operating EBITDA at ₹5,437 crore and net profit at ₹404 crore, impacted by a ₹342 crore exceptional charge for the Jajang iron ore mine surrender.

• Crude steel production reached 6.77 million tonnes, up 7% YoY, with Indian operations at 91% capacity utilization; domestic sales hit record highs while exports declined sharply.

• Major capacity expansions at BPSL and JVML were completed, and a JV acquisition of thyssenkrupp Electrical Steel India was announced.

• Sustainability initiatives advanced, with renewable power procurement at 2,507 MWs and a target of 25% renewable energy usage.

• Acquisitions included a 20% stake in Illawarra Coking Coal and a 66.67% interest in M Res NSW HCC Pty Ltd for Australian coal assets.

Financial highlights

• Q2 FY25 revenue was down 8% QoQ and 11% YoY; EBITDA margin was 13.7%, with EBITDA per ton at INR 8,916 and net profit at ₹404 crore.

• Net debt increased by ₹4,900 crore to ₹85,098 crore, mainly due to capex, acquisitions, and working capital; net debt/equity at 1.04x and net debt/EBITDA at 3.51x.

• Capex for Q2 was ₹3,384 crore; annual capex guidance revised to ₹16,000–17,000 crore.

• Standalone EBITDA margin for Q2 was 15.1%; H1 FY25 operating EBITDA margin was 13.25%.

• Cash and cash equivalents stood at ₹9,550 crore as of September 2024.

Outlook and guidance

• FY25 guidance retained at 28.4 million tons production and 27 million tons sales, with H2 expected to benefit from new capacity ramp-up, lower coking coal costs, and improved domestic demand.

• Domestic steel demand is projected to grow 10–11% in FY25, supported by government and private capex.

• Working capital release of ₹1,500–2,000 crore is expected in H2.

• The company expects continued impact from the Jajang mine surrender and ongoing legal matters related to Green Cess in Goa.

• RBI maintains a 7.2% GDP growth forecast for FY25, with a shift to a 'Neutral' policy stance.