Top Indian Companies: JSW Steel Ltd

JSW Steel Ltd is an Indian multinational steel making company based in the city of Mumbai, India, a subsidiary of JSW Group.

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, which operated a mini steel mill at Tarapur in Maharashtra and renamed it as 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.

Located 340 kilometers from Bengaluru, it is well connected to both the Goa and Chennai Port. In 2005, JISCO and JVSL merged to form JSW Steel Ltd. The JSW Ballari plant is the world's sixth largest steel plant.

JSW Steel formed a joint venture for a steel plant in Georgia. The company has also tied up with JFE Steel Corp, Japan for manufacturing the high grade automotive steel. JSW has also acquired mining assets in the Republic of Chile, United States and Mozambique.

Shareholding Pattern

The Shareholding Pattern page of JSW Steel Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 2417220440 100%

Promoters 1042845688 43.14%

Foreign Institutions 271042596 11.21%

NBanks Mutual Funds 57926683 2.4%

Central Govt 12375000 0.51%

Others 645402346 26.7%

General Public 197215742 8.16%

Financial Institutions 144464600 5.98%

Foreign Promoter 37964180 1.57%

GDR 7983605 0.33%

FY2023 Q4 and Full Year Results

JSW Steel on Friday posted 11.90 per cent rise in consolidated net profit at Rs 3,741 crore for March quarter 2022-23, helped by higher income.

Its net profit in the year-ago period was Rs 3,343 crore, JSW Steel said in a BSE filing.

Total income rose to Rs 47,427 crore from Rs 47,128 crore in the year-ago quarter.

Total expenses were at Rs 43,170 crore as against Rs 41,282 crore a year ago.

On a standalone basis, JSW Steel's net profit rose to Rs 2,828 crore from Rs 2,737 crore in January-March 2022. Income was at Rs 37,705 crore as against Rs 36,427 crore in the same period a year earlier.

Expenses on standalone basis were at Rs 33,767 crore as against Rs 31, 646 crore a year ago.

In a separate statement, JSW Steel said its overall crude steel production was at 6.58 million tonne (MT) during Q4 FY23, up 13 per cent over the year- ago period. Sales during the quarter also rose 9 per cent year-on-year to 6.53 MT.

"Its net debt as of March 31, 2023 stood at Rs 59,345 crore, lower by Rs 10,153 crore against December 31, 2022 due to healthy cash generation and release of working capital," JSW Steel said.

The board has recommended a dividend of Rs 3.40 per equity share of face value of Re 1 each for the year ended March 31, 2023. The total outflow on account of this dividend will be Rs 822 crore.

The company further said the 5 MTPA brownfield expansion at Vijayanagar plant is progressing well, with construction activities and equipment erection for all packages underway. The project is expected to be completed by the end of FY24.

Further, Phase-I expansion from 2.75 MTPA to 3.5 MTPA at Bhushan Power & Steel Ltd, owned by JSW Steel, was completed in FY23. Phase-II expansion to 5 MTPA is on track for completion in FY24.

The company's domestic capex spend was Rs 3,507 crore during Q4 FY23, and Rs 14,214 crore for FY23, against the revised planned amount of Rs 15,000 crore for the year.

JSW Steel is among the top six steel manufacturers in India.

Brokerage Outlook

ICICI Securities, Brokerage, maintain SELL on the stock, but increase our target price to Rs175 (earlier: Rs156). ICICI Securities looks through the improved performance of the standalone business into our estimates as the overall improved scenario of thermal generation in the country is expected to continue for the next few years.

While thermal PLFs continue to be high due to increase in power demand, 44.3% increase in average power prices on exchange during 9MFY22 over FY21 has resulted in increased contribution from thermal plants. Further, change of status of three units of Ratnagiri plant to captive is expected to lower uncertainties of its untied capacity and result in better PLFs, and thus higher profitability.

Key upside risks:

i) Faster than expected commissioning of upcoming capacities,

ii) ii) lower than expected coal costs and, iii) higher than expected merchant realisations.

ESG

At JSW Steel, we act as responsible green stewards, with prudent use of natural capital as inputs and minimal footprint as the outcome. We have in place a dedicated Environmental Management System (EMS) to help achieve this.

We are taking mindful steps to decarbonise our operations and reduce carbon dioxide (CO2) emissions across the board. We pursue circularity in mission mode, thus striving to become a part of the solution. Our innovation spectrum across water stewardship has been well-recognised and we continue to manage wastes and by-products efficiently. We also map diligently our dust and air emissions to ensure the well-being of the communities living in and around our impact zones.

At JSW Steel, our Climate Change Policy commits to preventing the causes of climate change; mitigating and adapting to the impacts and building overall resilience.