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India's JSW Steel beats its quarterly profit forecast on the back of firmer prices and steady volumes

India's JSW Steel reported a?profit in the first quarter that was more than twice as high, exceeding analyst estimates. Net profit margins also improved due to a?resilient volume and?firmer domestic prices, which outweighed the?pressure?from higher coal costs.

The top steelmaker in the country reported on Friday a net profit of 482.79 million rupees (46.51 billion rupiahs) for the three-month period ended June 30.

LSEG data shows that analysts had predicted an average of 31.11 billion rupees.

Elara Capital analysts said that prices of flat steel products like hot-rolled and cold-rolled coils rose in India both sequentially and on an annual basis, due to a weaker rupee as well as higher Chinese export offers.

According to Jefferies, the expansion of capacity across Indian steelmakers led to a healthy annual volume growth.

JSW Steel said that its sales volume increased 4% on an annual basis during the third quarter.

Analysts had expected 448.07 million rupees. Revenue from operations increased by 9.8%, to 473.64 milliards of rupees.

Steelmaker's net profits margins jumped from 5.12% to 9.91%, thanks to better realisations.

The domestic flat steel price, which makes up the bulk of JSW’s product mix, has held up better than the prices of long?steel, but the rising costs of coking coal and iron ore, two key raw materials have moderated some of the benefits.

The cost of materials consumed increased by 18.4%, resulting in an increase of 3.7% for total expenses to 418.30 Billion Rupees.

The company's capex guidance for fiscal 2027, which is 220-240 billion rupees (US$1), remained the same. ($1 = 96.3350 Indian rupees) (Reporting by Anuran Sadhu in Bengaluru; Editing by Janane Venkatraman)

(source: Reuters)