JSW Steel reported an 84.1% year-on-year (Y-o-Y) fall in consolidated net profit to Rs 439 crore for the July-September quarter (Q2FY25) on lower sales realisation due to low imports and an unusual charge.

Revenue from operations on a consolidated basis in Q2FY25 was Rs 39,684 crore, down 11% year on year from Rs 44,584 crore the previous year. Both revenue and net profit were less than the Bloomberg average expectation. Revenue was estimated at Rs 42,559.6 crore, with a profit of Rs 485.1 crore. 

Revenue fell 7.6% sequentially, but net profit fell 48%.

Steel sales for the quarter totaled 6.13 million tonnes (mt), a 3 percent decrease year on year. Domestic sales, at 5.57 mt, were the greatest in any quarter, up 1% year on year, driven by the institutional segment; sales volumes to the institutional segment climbed by 12% year on year.

Retail sales decreased 14% as imports rose. Exports of 0.39 million tonnes plummeted by 43% year on year due to higher Chinese exports, which harmed worldwide markets, the business said.

An extraordinary charge had an influence on profit as well. The business announced the closure of the Jajang iron ore mine in Odisha's Keonjhar district owing to unprofitable operations. It recorded a net provision of Rs 342 crore for the underlying carrying value of the assets during the quarter.

However, lower sales realisation had an influence on the EAF-based steel manufacturing facility in Ohio, USA. It had an Ebitda loss of $16.14 million in the quarter.The US plate pipe mill in Texas reported an Ebitda of $5.04 million, while the Italy operations reported an Ebitda of €6.15 million ($6.6 million) for the quarter.

The company's consolidated capex cost in Q2FY25 was Rs 3,384 crore, whereas the overall spend in H1 was Rs 7,850 crore. However, the overall capex for FY25 has been lowered to Rs 16,000-17,000 crore from an earlier estimate of Rs 20,000 crore. The business ascribed it to the transfer of the slurry pipeline project to JSW Infrastructure and the postponing of the blast furnace -3 expansion at Vijaynagar until next year.

On the outlook, the business stated that steel demand is projected to remain strong in H2FY25. "The RBI's shift in monetary policy stance to 'neutral' from 'withdrawal of accommodation' is a positive move, paving the way for potential policy easing," it said, adding that the macroeconomic outlook is still strong.