Steel major JSW Steel aims to achieve 94-95% of its guidance this year. Its guidance for crude steel production is at 18.5 million tonnes (mnt) while in sales, it is aiming to sell 17.4 mnt of steel in FY’22, SteelMint learned from the company’s investors’ call held on 21 Jan’22.
Key projects in the pipeline:
- The comany’s Dolvi works plans to set up two power plants. Out of the two, one is likely to be commissioned in Feb’22 and the other, in Mar’22 — this will further reduce the cost of production.
- The coke oven plant in Vijayanagar and downstream lines such as GI in Vijayanagar, colour coating and Cal line in Vasind, tinplate II at Tarapur shall be commissioned before 30 Jun’22, SteelMint noted from the investors’ call.
Net sales realisation (NSR) on a blendid basis rose 2% as auto prices got settled in the last quarter, with an improved sales mix. However, there was an increased cost pressure. Coking coal prices by up to $100/t were absored which raised the cost of production by 17%, which, in turn, impacted EBITDA.
Other highights
1. Highest-ever crude steel production in Q3: JSW Steel recorded highest-ever standalone crude steel production of 4.41 mnt in Q3FY’22, up by 8% as against 4.10 mnt in Q2FY’22. Along with this, flat steel production stood at 2.98 mnt and long steel production stood at 0.93 mnt in Q3.
Increase in the capacity utlisation rate to 94% from the exisiting operations and production volumes of 0.18 mnt from its recent Dolvi phase II expansion has contributed in a rise in production volumes.
2. JSW’s steel sales up 6% in Q3FY’22: The company’s total sales stood at 4 mnt in Q3FY’22 as against 3.79 mn t in Q2FY’22, up 6% q-o-q as demand from automotives, solar and appliances increased. Sales of flat steel products were at 3 mn t, while long product sales stood at 0.88 mn t. JSW’s sales of semi-finished steel were recorded at 0.12 mn t in Q3FY’22.
3. Export volumes decline q-o-q: The company reported a sharp decrease in its export volumes q-o-q because of increased sales in the domestic market.
Export sales accounted for 15% of the total sales in Q3FY’22 which was around 30% of total sales in Q2FY’22.
4. EBIDTA at INR 6,797 cr in Q3FY’22: The company posted an operating EBIDTA at INR 6,797 crore in Q3FY’22, lower by 22% q-o-q with an EBITDA margin of 23.6%. The EBITDA margin was lower q-o-q primarily due to elevated coking coal prices and higher power cost. However, domestic iron ore prices during Q3 softened in line with global indices, partly setting off the cost increase.
5. Automotive sales up: JSW Steel’s domestic automotive sales increased by 2% q-o-q while domestic automotive production edged down by 10% q-o-q in India.
6. BPSL’s production and sales down: Bhushan Power and Steel Ltd (BPSL) recorded its crude steel production at 0.64 mn t in Q3FY’22, down 7% as against 0.69 mn t a quarter ago. While sales too dropped 24% to 0.58 mn t in Q3 versus 0.76 mn t in Q2.
7. JSW Steel coated products (consolidated) performance: During the quarter JSW Steel Coated Products (GI/GL + tin) registered a production of 0.73 mn t and sales volumes stood at 0.77 mnt in Q3FY’22.
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