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### About the Company: JSW Steel
JSW Steel is a leading Indian steel producer and part of the JSW Group. The company is engaged in manufacturing a wide range of steel products and operates several state-of-the-art facilities in India and abroad. JSW Steel is known for its innovation and sustainability initiatives and has a significant presence in various segments including automotive, construction, and infrastructure. It is one of the fastest-growing companies in India with a global footprint in over 140 countries.
### In_organic Growth History:
After the merger of ISPAT steel, JSW Steel has become India's second-largest private sector steel company. JSW's history can be traced back to 1982 when the Jindal Group acquired Piramal Steel Limited and renamed it Jindal Iron and Steel Company (JISCO). Soon after the acquisition, the group set up its first steel plant in 1982 at Vasind near Mumbai. Jindal Vijayanagar Steel Ltd. (JVSL) was set up in 1994, with its plant located at Toranagallu in Ballari, Karnataka, the heart of the high-grade iron ore belt and spread over 10,000 acres (40km²) of land. The JSW Ballari plant is the world's sixth-largest steel plant. JSWSTEEL has grown from a single manufacturing unit to become India's leading steel company with a capacity of 28MTPA in India and the US. In the next 5 years, we may see them expand to 37.5 MTPA. The Vijayanagar plant is the largest single-location steel producing facility in India with a capacity of 12 MTPA. The company has also tied up with JFE Steel Corp, Japan for manufacturing high-grade automotive steel.
### Industry Overview
The steel industry is a crucial component of the global economy, providing essential materials for construction, automotive, manufacturing, and other sectors. The industry is characterized by high capital intensity and significant energy consumption. Key drivers include economic growth, infrastructure development, and urbanization.
### Peer Group Comparison
JSW Steel's main competitors in the Indian market include Tata Steel, Steel Authority of India Limited (SAIL), and ArcelorMittal Nippon Steel India (AM/NS India). These companies are also major players globally and engage in similar business activities, offering a wide range of steel products.
### Historical Performance of JSW Steel
JSW Steel has demonstrated robust growth over the years, leveraging strategic expansions, acquisitions, and technological advancements. The company has consistently enhanced its production capacity and operational efficiency, contributing to its strong financial performance.
Fy_05: 20 years back with 2.1 MNT Steel, sales and profit was around 7000 Cr and 900 Cr respectively and the price was 35.
Fy_15: 10 years back reached 12.6 MNT Steel, sales and profit reached around 57000 Cr and 1800 Cr respectively and the price came to 90 which was around 3X.
Fy_24: Last year they reached 26.7 MNT Steel, sales and profit reached around 1.75 Lakh Cr and 9000 Cr respectively and the price came to 830 which was around 25X in 20 Years.
In the last 2 decades we saw the volume growth of 13X, Sales growth of 26X and Price (Value) increase of near to 25X.
### Q1 FY25 Results Insights
#### Financial Performance
- **Consolidated Crude Steel Production:** 6.35 million tonnes (down 1% YoY)
- **Consolidated Steel Sales:** 6.12 million tonnes (up 7% YoY)
- **Revenue from Operations:** ₹42,943 crore
- **Revenue Growth:** The revenue from operations was ₹42,943 crore in Q1 FY25, which represents a slight increase compared to Q1 FY24.
- **Operating EBITDA:** ₹5,510 crore
- **Net Profit:** ₹867 crore
- **Profit Growth:** The net profit for Q1 FY25 was ₹867 crore, showing a decline from Q1 FY24's net profit of ₹2,428 crore.
- **Net Debt to Equity:** 0.97x
- **Net Debt to EBITDA:** 3.00x
### Profitability Ratios
- **Operating EBITDA Margin:** Approximately 12.8%
- **Net Profit Margin:** Approximately 2%
### Solvency and Leverage Ratios
- **Net Debt to Equity:** 0.97x
- **Net Debt to EBITDA:** 3.00x
- **Finance Cost:** ₹2,073 crore
### Earning Ratios
- **Diluted EPS:** ₹3.45 (not annualized)
### Near Term
This year due to the slowdown in the realty industry in China, the dumping to the world as well as in India. India import increased by 28%, export decreased by 36% overall affecting domestic companies sales growth. Consumption in India stood extremely strong with the growth of 14%. This year we may see 5% in sales growth and if profit margin pressure continues then profitability could fall more by 59%. Considering the strong consumptions all those bought during past fall could see the pending target of 1085 getting clear soon where around 10% Profits can be booked while new buying again can be done during any fall near 545.
### Future Outlook
We may see JSWsteel cross 50 MNT of steel till fy_35 helping the company to cross 5 Lakh Cr of sales giving a multiyear rally in the long term. Due to high capex profitability could be inconsistent. JSW Steel aims to continue its focus on sustainability, digital transformation, and strategic growth. The company is targeting net neutrality in carbon emissions by 2050 and is committed to enhancing its product portfolio through innovation and R&D. The ongoing and planned capacity expansions are expected to strengthen its market position and improve profitability.
### Disclosure
FOR EDUCATION PURPOSES, DO NOT TREAT AS A RECOMMENDATION
