JSW Steel (JSWSTEEL) Q4 16/17 earnings summary

Executive summary

• FY17 standalone crude steel production rose 26% YoY to 15.80 Mt and steel sales rose 22% to 14.77 Mt; reported ROCE was 14%.

• FY17 standalone revenue was ₹56,913 crore, Operating EBITDA ₹11,543 crore and PAT ₹3,577 crore; consolidated revenue was ₹60,536 crore, EBITDA ₹12,174 crore and PAT ₹3,467 crore.

• Q4FY17 set standalone records of 4.10 Mt crude steel production and 3.96 Mt steel sales; consolidated revenue was ₹17,917 crore and Operating EBITDA ₹3,165 crore.

Financial highlights

• FY17 standalone revenue grew 39% YoY and Operating EBITDA 81%; consolidated revenue grew 32% and Operating EBITDA 90%.

• Q4FY17 standalone revenue rose 60% YoY to ₹16,952 crore and PAT rose 173% to ₹1,003 crore; consolidated revenue rose 53% to ₹17,917 crore and PAT 235% to ₹1,009 crore.

• Q4FY17 standalone Operating EBITDA was ₹3,004 crore, up 55% YoY; consolidated Operating EBITDA was ₹3,165 crore, up 64%; both margins were 19.0%.

• FY17 diluted EPS was ₹14.80 standalone and ₹14.58 consolidated; basic EPS, restated for the share subdivision, was ₹14.89 and ₹14.66, respectively.

Outlook and guidance

• FY18 guidance: crude steel production of 16.50 Mt, up 4.4% YoY, and saleable steel sales of 15.50 Mt, up 4.9%.

• Indian steel demand was expected to grow ~4 Mt, or ~5%, in FY18, supported by infrastructure spending, improving consumer demand and rural recovery.

• The Dolvi expansion to 10 Mtpa was planned for completion by March 2020; the Vijayanagar BF-3 upgrade was scheduled within 20 months.