JSW Steel Ltd.: 1QFY27: Robust earnings, deleveraging underpins positive outlook, MW on FV

研报英文原文证据摘录

JSW Steel Ltd.: 1QFY27: Robust earnings, deleveraging underpins positive outlook, MW on FV

rom the sale of

BPSL supported capex of INR49bn in the quarter and further decline in the group’s

reported leverage (net-debt/EBITDA) to 1.5x (4QFY26: 1.8x, 1QFY26: 3.2x).

Strong growth outlook despite price watchpoints

We expect earnings momentum to continue with ~10% annual sales volume growth (ex-

BPSL) and largely stable margins. While 2Q could be softer due to weaker steel prices

and higher coal costs, lower iron ore costs and capacity ramp-up could support recovery

from 3Q. Direct exposure to the West Asia conflict is limited, with gas-linked capacity

accounting for <5%. China's efforts to curb disruptive domestic competition and India's

12% safeguard duty on steel imports are positive. However, a further decline in China

HRC export prices and geopolitical risks remain key watch points, though India's ongoing

anti-dumping investigation amid higher recent imports could provide offsetting support.

The growth projects remain on track, with the Vijayanagar BF-3 expansion

commissioned and ramping up. The Dolvi, Utkal, JVML-Vijayanagar, Kadapa and

downstream expansions are progressing as planned. Management maintained FY27

capex guidance of INR220bn-INR240bn and targets domestic steel capacity of 62mn

tons by FY32 (ex-16mn tons through JVs), while meeting 50% of iron ore and coking coal

requirements through captive sources. The group has lowered its maximum leverage

target to 3.0x from 3.75x and aims to keep leverage below 2.5x on a sustained basis.

Reco: Marketweight JSTLIN as valuation reflects improving credit profile.

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