JSW Steel (JSWSTEEL) Q4 20/21 earnings summary

Executive summary

• Recovered from pandemic-related disruption through higher exports, value-added products, cost controls and the start-up of newly acquired iron ore mines; March 2021 capacity utilisation reached 96%.

• FY 2020-21 delivered record consolidated operating EBITDA of ₹20,141 crore as demand and steel prices strengthened in H2.

Financial highlights

• Consolidated revenue from operations was ₹79,839 crore, up 9% YoY; operating EBITDA rose 70% to ₹20,141 crore and PAT increased 101% to ₹7,873 crore.

• Standalone revenue from operations rose 10% to ₹70,727 crore; operating EBITDA increased 54% to ₹19,259 crore, with a 27.2% margin vs 19.5%.

• Standalone PAT was ₹8,393 crore, up 59% YoY; diluted EPS was ₹34.72 vs ₹21.89.

• Consolidated operating cash flow was ₹18,789 crore vs ₹12,785 crore; capex and acquisitions remained funded alongside lower net debt.

Outlook and guidance

• Approved capex of ₹25,115 crore over FY 2021-22 to FY 2023-24, including ₹6,565 crore for sustenance and other capex; projects target combined steelmaking capacity of 37.5 MTPA by FY 2024-25.

• Vijayanagar’s 5 MTPA expansion is planned for completion by FY 2023-24; Odisha mine upgrades and a 0.12 MTPA colour-coated facility in Jammu & Kashmir are also planned.

• Domestic steel demand is forecast at 110 MnT in FY 2021-22; recovery may be pressured near term by the second COVID-19 wave, with stronger domestic demand expected in H2 FY 2021-22.

• Overseas operations were expected to improve in FY 2021-22; long-term plans target 45 MTPA capacity by FY 2030-31.