Q1 Earning Preview : JSW Steel To Shine Brighter Than Metal Sector Rivals: Time To Buy Before Q1 on July 18?

Q1 Earnings Preview: JSW Steel shares are trading in green on Thursday, a day ahead of its June quarterly result announcement on July 18. The Sajjan Jindal-led group's flagship firm is likely to report a strong growth in the quarter and may even outshine its peers in the ferrous metal segment.

JSW Steel shares opened lower today and were trading 0.12% higher at Rs 1030.50 per share on BSE at 10:11 am. The stock had touched an intraday high mark of Rs 1033.25 per share and an intraday low mark of Rs 1027.45 per share.

JSW Steel Q1 Earnings Review

JSW Steel is likely to see a sequential increase in its consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) during the quarter. According to Emkay Research, the Indian steelmaker is likely to "report consolidated EBITDA of Rs71.2bn, up 11.7% QoQ, mainly driven by better realisation and lower coking coal cost, which is partially offset by higher iron ore cost in Q1."

JSW Steel's business may also see growth due to better realisations and lower raw material costs. Multiple additional factors are also likely to benefit the company to outshine its peers in the segment, according to Systematix Institutional Equities.

"We expect JSTL to outperform its peers in the pack helped by operating leverage and incremental backward integration benefits," read Systematix Institutional Equities report.

JSW Steel Revenue Growth in FY26

"We estimate double-digit revenue growth in FY26/FY27, driven by the ramp-up of new capacity and price recovery. Further, as input costs are expected to remain soft, we believe EBITDA margin would rebound to 18-19% in FY26/FY27 (~INR12,000/t in FY26E and ~INR13,500/t in FY27E) on account of domestic steel price recovery led by safeguard duty," added Motilal Oswal in its report.

At present, the company is focusing on reducing costs by boosting its raw material integration, logistics efficiency and higher renewable energy (RE) share. It is currently meeting around 37% of its iron ore needs via captive mines and is aiming to increase the capacity to 50% by the end of current financial years. Its mining locations in Karnataka, Odisha and Goa would help the firm in boosting expansions. For coking coal, JSW Steel has domestic coal mines as well as overseas assets in Illawarra and Mozambique.

JSW Steel Stock Price Recommendation

Timely commissioning at steady intervals and ramp-up of newly added capacity will boost JSW Steel's business in the long run. It will also benefit from the newly added capacity in the present financial year, according to Motilal Oswal brokerage. It gave a 'Buy' rating for the metal stock with a target price of Rs 1,180 per share.

"At CMP, JSTL trades at 7.6x FY27E EV/EBITDA. We reiterate our BUY rating on the stock with a TP of INR1,180 (premised on 8.5x EV/EBITDA on FY27 estimate)," stated the brokerage in its report.

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