Posted on 15 Mar 2018
JSW Steel has reported monthly crude steel production at 1.33 billion tonnes for February 2018 with yoy growth of 5%.
The stock is currently trading at Rs301 down by Rs2.4 or 0.79% from its previous closing of Rs303.40 on the BSE.
The scrip opened at Rs304.95 and has touched a high and low of Rs304.95 and Rs299.75 respectively.
JSW Steel is the largest private sector steel manufacturer in the country with a capacity of 18mn tonnes per annum (mtpa) in FY17. The company aims to expand this capacity to 23mtpa by 2020. The company also owns a plate mill in USA and iron ore mines in Chile. The standalone finished steel production for the company stood at 11.4mt for 9MFY18, an increase of 5% yoy. The management has stated a production target of 15.5mt for FY18.
We expect the company to report revenue CAGR of 7.4% over FY17-20E aided by (a) 8.6% CAGR volume growth in sale of steel products supported by spending on construction and infrastructure and (b) affordable schemes to help in higher real estate spending. EBITDA margins are also likely to expand by ~252bps owing to better utilization levels. The stock is currently trading at 10x FY20E EPS.
