JSW Steel Q2 net loss seen at Rs 150 cr on steel demand

21 October 2015

Weak domestic steel demand and higher steel imports are likely to drag JSW Steel  's July-September quarter results. The company is expected to report net loss at Rs 150 crore in Q2FY16 from a net profit of Rs 750 crore in corresponding quarter last fiscal, according to a CNBC-TV18 poll.

During the period, total income may see a decline of 9 percent at Rs 10990 crore against Rs 13695 crore on an annual basis. Operating profit is seen slipping 44.8 percent at Rs 1540 crore compared to Rs 2791.3 crore while operating profit margin (OPM) may come in at 14 percent versus 20.4 percent (Y-o-Y).

Sharp fall in global prices may hit realisations, say analysts polled by CNBC-TV18. Realisations may fall 5-7 percent (Q-o-Q) and down 15 percent (Y-o-Y). EBITDA may sink as lower steel realisations will outweigh any benefits.

Impact of the safeguard duty of 20 percent will be felt only in Q3FY16. Production numbers were weak in  Q2 on account of shutdowns.

JSW Steel's international business may remain a drag as it had closed its Chile iron ore mines owing to weak prices. US plate and pipe mill are also not expected to contribute significantly.