JSW Steel Q2 results: Net profit falls over 85% to ₹404 crore owing 11% decline in income

The scrip closed at ₹943.85, down 1.49% (-₹14.25) on the NSE on Friday, October 25.

Fall in income

The company’s total income fell to ₹39,837 crore in the second quarter of FY25 as compared to ₹44,821 crore in the same quarter last year, posting a YoY decline of 11.12%.

Further, the company stated that its expenses were lower at ₹8,644 crore in the quarter under review as against ₹40,801 crore in Q2 FY24.

In a statement, the company said its net debt stood at ₹85,098 crore as of September 30, an increase of ₹4,899 crore as of June 30. This is due to capital expenditure on ongoing expansion projects, acquisition of an effective stake of 20% in Illawarra coking coal assets and increase in working capital.

At the end of the September quarter, JSW Steel said its net debt to equity (or net gearing) stood at 1.04 times as against 0.97 times in the previous quarter, and its leverage (net debt to EBITDA) stood at 3.51 times, as against 3.00 times at the end of Q1 FY25.

Consolidated capex

The company’s capex spend during Q2 of this fiscal was at ₹3,384 crore, and the total spend for H1 stood at ₹7,850 crore.

"We now expect consolidated capex for FY25 to be ₹16,000-17,000 crore as against the earlier estimate of ₹20,000 crore mainly due to the transfer of the Slurry Pipeline project to JSW Infrastructure, and rescheduling the BF-3 expansion to the next year," JSW Steel said.

EBITDA

The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) for Q2 FY25 stood at ₹5,437 crore in comparison to ₹7,886 crore in the year-ago quarter. Additionally, its EBITDA margins fell to 13.7% from last year’s 17.7%.

Steel Production

Furthermore, JSW Steel reported an increase in its crude steel production, posting a 7% YoY increase from producing 6.34 million tonnes (MT) of crude steel in Q2FY24 to 6.77 MT in Q2 FY 25.

However, its sales decreased by 4% to 5.96 MT in the quarter from 6.34 MT a year ago.

Exports contributed 7% from India operations.

The exports which were at 0.39 MT fell by 43% YoY and 34% quarter-on-quarter (QoQ) due to elevated Chinese exports adversely affecting global markets.

The company surrendered the Jajang Iron Ore mine in Odisha, this quarter, as the operations became economically unviable.