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JSW Steel Ltd Q1 Results FY22-2023

22 July 2022

Leading steel manufacturing company JSW Steel Ltd posted its Q1 FY23 results on July 22, 2022. 

The company reported a dip of 85.7% YoY (Year on Year) in its net profit which came in at Rs 839 crore for the quarter under review. It has reported a net profit of Rs 5,900 crore in the year ago period. On a sequential basis, the net profit took a plunge of nearly 80% to Rs 839 crore from Rs 3,343 crore in the previous quarter.

The sharp dip in JSW Steel’s net profit is largely attributable to a 27% YoY dip in exports, primarily due to weaker global demand. The Russia-Ukraine crisis furthered the crash in demand which led to fewer orders for JSW Steel. Amid a worsening climate with falling steel prices across the globe, and adding fuel to the fire, the Government of India also imposed a 15% export duty on steel export. In a statement, however, the company said that it hoped the export duty is only a temporary measure and may be tapered off as inflation starts to ease.

JSW Steel’s revenue from operations was up 31.7% QoQ to Rs 38,086 crore from Rs 28,902 crore in Q4 FY22. However, the revenue from operations on a YoY basis was down by 18.7% to Rs 38,086 crore from Rs 46,895 crore in the corresponding quarter in the previous fiscal year.

Hits of JSW Q1 Results FY22-2023

  • Revenue from operations was up 31.7% QoQ to Rs 38,086 crore from Rs 28,902 crore in Q4 FY22.
  • Total income was up 31.5% YoY to Rs 38,275 crore 
  • Supplies to the auto sector were up 51% YoY and 8% QoQ.
  • Sales to appliances up 81% YoY.
  • Sales to solar segment up 10% YoY.

Misses of JSW Quarterly Result Q1

  • Net profit down 85.7% YoY, 80% QoQ to Rs 839 crore from Rs 5,900 crore in the year ago period and Rs 3,343 crore in the previous quarter respectively.
  • Revenue from operations down 18.7% YoY to Rs 38,086 crore 
  • Exports fell 27% YoY and 35% QoQ on imposition of export duty in May 2022, and elevated exports in Q1 FY22 due to Covid.
  • Earnings Per Share (EPS) down to Rs 3.49 from Rs 13.47 in the previous quarter and Rs 24.53 in the year ago period.

Sales and Production Volumes

  1.     Crude Steel Production

Crude steel production remained largely flat on QoQ basis at 5.00 million tonnes.

Crude steel production on a YoY basis was up by 22% to 5.00 million tonnes from 4.10 million tonnes in the year ago period.

  1.     Steel sales

Steel sales down by 21% QoQ to 4.03 million tonnes from 5.11 million tonnes in the previous quarter.

Steel sales up 12% YoY to 4.03 million tonnes from 3.61 million tonnes in the year ago period.

What the Management says about JSW Q1 Results

During the first quarter of FY23, high inflation across major economies on the back of supply chain disruptions and the Russia-Ukraine conflict has impacted the global economic outlook. While India has been relatively resilient with economic activity recovering from the Covid induced slump, high inflation and policy rate tightening across the world have become formidable headwinds.

Management Outlook

The global economic outlook has weakened due to high inflation across most economies, with elevated energy and food prices affecting consumption. The ongoing Russia-Ukraine conflict and frequent Covid related lockdowns in China have disrupted global supply chains, and caused spikes in energy prices. The World Bank, in its June outlook, has reduced its global growth forecast to 2.9%, from 4.1% in January.

Other things to know about JSW Steel Ltd Results

  • The Company's capex spend was Rs 3,702 crores during Q1 FY23, against the planned capex spend of Rs 20,000 crores for FY23. Considering the current market conditions, the company expects to calibrate its capex spend to Rs 15,000 crores for FY23.
  • JSW’s P/E ratio is at 6.83 against the industry average of 12.11 
  • The company’s P/B ratio is at 2.06 against the sector average of 2.59. 
  • JSW Steel’s dividend yield is at 3.71% against the industry average of 2.50%
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