JSW Steel’s Q3 Earnings: Record Sales Overpowered by Slumping Steel Price and Import Surge

India’s largest steel producer, JSW Steel Ltd, has reported mixed results for the October-December quarter: falling steel prices and rising imports proving to be a serious challenge. Even as the company reached record sales and production, profitability was badly dented.

In the third quarter of FY25, JSW Steel achieved capacity utilization of 91% with production of 6.82 million tonnes of steel, thus growing 3% both sequentially and year-on-year. With domestic sales going all-time close to 6 million tonnes and value-added products growing by 12%, the sale mix improved significantly.

That wasn’t all, however. The financial performance was a far cry from what was expected. Consolidated revenue was down 1% year-on-year at ₹41,378 crore. EBITDA fell 22% to ₹5,579 crore, and the margin shrank by 360 basis points to 13.5%. The consolidated profit stood at ₹719 crore, less than a third of the ₹2,688 crore reported a year ago.

The main reason for the decline has been the heavy fall in steel prices, coupled with a surge in cheaper imports from countries like China. The prices for hot-rolled coil, or HRC, steel fell 15% from the same period last year and averaged ₹47,708 per tonne in Q3FY25 compared with ₹56,050 per tonne in the same quarter last year. That is the lowest since November 2020.

Lower raw material costs despite the adverse market conditions, helped alleviate some of that impact. “While the average selling price declined by ₹1,186 per tonne quarter-on-quarter, the reduced raw material expenses did soften the blow to EBITDA,” noted Parthiv Jhonsa, lead analyst at Anand Rathi.

For the quarter, JSW Steel clocked a consolidated EBITDA of ₹8,314 per tonne, down 31% from ₹11,967 per tonne a year ago. EBITDA per tonne declined sequentially by ₹555, with cost-saving measures helping, also better mix and sales to institutional and retail customers.

Net debt increased marginally to ₹80,921 crore on the balance sheet, as of December 31, 2024, as against ₹79,221 crore a year ago. The net debt-to-EBITDA worsened by 3.57 times from 2.64 times, mainly driven by the steep decline in earnings.

JSW Steel stock ended at ₹932.25 on Friday, posting a gain of 0.26%, as the Sensex ended this session 0.43% lower. A look at the results speaks for the unyielding environment to which steelmakers are exposed, falling prices, and the ever-rising threat of imports.