Profit rises even as revenues decline

JSW Steel reported a consolidated net profit of ₹1,503 crore ($180.3 million) for the fourth quarter of FY25, reflecting a 16% increase from ₹1,299 crore ($155.8 million) reported during the same period last year. The jump in profits was driven largely by a notable decline in raw material costs, which offset a downturn in overall revenue. While many in the industry struggled with a sluggish market, JSW Steel managed to improve profitability by focusing on margin optimisation and disciplined cost controls.

Revenue contracts due to weak global pricing

Total revenue from operations fell by 3% year-on-year to ₹44,819 crore ($5.37 billion), compared to ₹46,269 crore ($5.54 billion) in Q4 FY24. The decline mirrored the broader steel sector’s struggles, as global demand stagnated and cheap imports from China and Southeast Asia continued to undercut local prices. Steelmakers across the board have experienced revenue compression due to an inability to raise prices in this oversupplied environment.

EBITDA performance reflects operational strength

Operating EBITDA for Q4 FY25 stood at ₹6,378 crore ($764.6 million), up from ₹6,124 crore ($733.8 million) in the same period last year. This rise in earnings before interest, taxes, depreciation, and amortisation pushed the margin to 14.23%, compared to 13.2% a year ago. JSW Steel attributed this improvement to better operational efficiencies and falling input costs, including iron ore and coking coal.

Domestic demand offers a silver lining

A strong uptick in domestic sales helped cushion the blow from global headwinds. The company sold 7.49 million metric tons of steel in the quarter, up 11% year-on-year. Notably, domestic sales surged by 30%, driven by increased demand from India’s infrastructure and automotive sectors. This shift highlights a growing reliance on the domestic market to sustain growth amidst global uncertainties.

No Bhushan Power provision boosts bottom line

JSW Steel reported no new provisioning related to Bhushan Power and Steel Ltd, which had been an ongoing financial burden in previous quarters. This provided a further lift to the bottom line, improving net profitability. With clarity on the BPSL front and no extraordinary charges this quarter, the company's earnings better reflect core operational health.

Capital expenditure lower than revised target

For FY25, JSW Steel spent ₹14,656 crore ($1.76 billion) on capital expenditure, below the revised target range of ₹16,000 crore–₹17,000 crore ($1.92–$2.04 billion). The company had earlier scaled back from its initial guidance of ₹20,000 crore ($2.4 billion) due to cash conservation measures and improved efficiency. This disciplined spending, combined with better cash flows and the release of working capital, has bolstered the company’s financial position.

Net debt sees a significant reduction

As a result of improved financial discipline, JSW Steel reduced its net debt by ₹4,358 crore ($522.3 million) during Q4 FY25. The company’s total net debt stood at ₹76,563 crore ($9.18 billion) at the end of FY25, compared to ₹80,921 crore ($9.7 billion) on December 31, 2024. The debt reduction aligns with the company’s broader goal of strengthening its balance sheet and preparing for future expansions.

FY26 outlook signals aggressive targets

Looking ahead, JSW Steel has projected an ambitious production target of 30.50 million metric tons for FY26. It is also targeting consolidated sales of 29.20 million metric tons, with the majority of it coming from its Indian operations. The company’s focus remains on expanding its domestic footprint, leveraging government-led infrastructure spending, and enhancing production efficiency to meet upcoming challenges.

Key Takeaways

• JSW Steel’s Q4 FY25 profit rose 16% to ₹1,503 crore ($180.3 million) despite a 3% drop in revenue.

• Domestic steel sales grew 30%, while total quarterly sales rose to 7.49 million metric tons.

• Capital expenditure for FY25 was ₹14,656 crore ($1.76 billion), with net debt reduced by ₹4,358 crore ($522.3 million).