JSW Steel shares slide 3% after Q3 PAT plunges 70% YoY. Should you stay invested?

JSW Steel's shares slid 3.6% to an intraday low of Rs 898.90 on the BSE on Monday, January 27, following the company’s report of a net profit of Rs 717 crore for the quarter ended December 31, 2024, marking a 70% year-on-year (YoY) decline from Rs 2,415 crore in the same quarter last year.

Revenue from operations also saw a 1% YoY decline, totaling Rs 41,378 crore.

EBITDA for the quarter stood at Rs 5,579 crore, with an EBITDA margin of 13.5%, as a fall in steel realizations was offset by higher volumes and lower costs of primary coking coal.


Consolidated crude steel production for the quarter stood at 7.03 million tonnes, higher by 2% YoY. Capacity utilization of the Indian operations was 91% during the quarter.

Steel sales for the quarter stood at 6.71 million tonnes, higher by 12% YoY.

In Indian operations, crude steel production rose 3% YoY to 6.82 million tonnes. Steel sales increased by 12% YoY to 6.54 million tonnes, while domestic sales grew 14% YoY to 5.99 million tonnes, driven by strong institutional and retail sales.

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Should you buy, sell, or hold JSW Steel's stock? Here's what analysts say:

Citi

Citi maintained a 'Sell' rating on JSW Steel, with a target price of Rs 715, slightly revised from Rs 700.

The company’s Q3 results were slightly below expectations, despite a 10% quarter-on-quarter (QoQ) and 12% YoY increase in sales volume in India. However, weaker realizations and a decline in spot prices have raised concerns. Citi believes that the stock’s valuations are likely stretched, indicating limited upside potential.

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Morgan Stanley

Morgan Stanley maintained an 'Overweight' rating on JSW Steel with a target price of Rs 1,150.

The company reported a small EBITDA beat, with volume growth exceeding expectations. Realizations were slightly ahead at Rs 56,900 per ton, while the performance of subsidiaries was also better than anticipated. Additionally, consolidated net debt has moderated, further strengthening the company’s financial position.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)