JSW Steel - Q1FY2014 Result Review - Angel Broking

JSW Steel's (JSW) 1QFY2014 top-line was below our estimate while its operating margin was above our estimate. The results are not comparable with 1QFY2013 results as JSW Steel has merged with JSW Ispat during 4QFY2013. JSW Steel's standalone net sales stood at Rs. 9,235cr, below our estimate of Rs. 11,147cr. JSW Steel's EBITDA stood at Rs. 1,749cr, representing an EBITDA margin of 18.9% above our estimate of 17.4%. Adjusted net profit (excluding forex loss of Rs. 852cr) stood at Rs. 632cr (above our estimate was of Rs. 585cr).

With slower than expected ramp up of iron ore mining in Karnataka, we believe increasing steel production meaningfully during FY2014 would remain a challenge. Moreover, we opine that JSW Ispat's merger with JSW Steel is likely to erode JSW steel's margins. We maintain our Neutral view on the stock.

Source : Equity Bulls

Keywords