JSW Steel Company analysis

Industry Profile  :  India is worlds third largest steel producer. Being developing economy, India needs steel to manufacturing its ever growing automobile industry, to build infrastructure like railway, dams roads etc. Growth of the sector is largely driven due to availability of raw steel. India’s crude steel output grew 10.7 per cent year-on-year to 25.76 million tonnes (MT) during January-March 2017. India’s crude steel output during April 2017 grew by 5.4 per cent year-on-year to 8.107 MT. Finished steel exports rose 102.1 per cent to 8.24 MT, while imports fell by 36.6 per cent to 7.42 MT in 2016-17. India’s steel exports rose 142 per cent in April 2017 to 747,000 tonnes over April 2016, while imports fell by 23 per cent to 504,000 tonnes in April 2017 over April 2016. Total consumption of finished steel grew by 3.4 per cent year-on-year at 6.015 MT during April 2017. Obviously the sector is one important in making export and earning foreign exchange. According to the data released by Department of Industrial Policy and Promotion (DIPP), the Indian metallurgical industries attracted Foreign Direct Investments (FDI) to the tune of US$ 10.33 billion in the period April 2000–March 2017.

Company Profile  :  The company is Flagship company of JSW group and having plants in six places in India including Vijayanagar in Karnataka, Salem in Tamil Nadu, and Tarapur, Vasind, Kalmeshwar and Dolvi in Maharashtra. The company is manufacturing flat and long steel products includes hot rolled (HR) coils, sheets and plates; cold rolled coils and sheets; galvanized products; galvalume products; non-grain oriented electrical steel (CRNGO); pre-painted galvanized products (color coated sheets/coils); pre-painted galvalume products; wire rods; special steel bars/wires; rounds and blooms, and angles. Its color coated products include JSW Pragati, JSW Colouron and JSW Colouron+. Its galvanized products include JSW Vishwas and GALVOS.

Shareholding Pattern  :  39 promoter entities hold 41.62% out of which 1 is karnataka industrial Development Corp, Some are HUF, Two are foreign entities. JSW Techno projects and JSW Holding are two large promoter out of them. 1.82% held by mutual funds. 0.34% held by Financial Institutions.19.93% held by Foreign Investors. 26.11% held by General public, One govt entity other than karnataka Industrial Development Corp and other public. The company is listed on offshore exchanges and so 15,146,090 shares held by Custodians for depository receipts.

Financials and ratios  : 

 2010 - 112011 - 122012 - 132013 - 142014 - 152015 - 162016 - 17
Revenue23,601.6232,301.9635,752.6945,628.7746,554.0937,017.1152,545.57
Net profit2,010.671,625.861,801.221,334.512,166.48(3,498.28)3,576.54
NPM8.51%5.03%5.03%2.92%4.65%-6.80%
EPS96.3371.4279.2853.8688.24(146.11)14.80
Book value596.38641.16691.83776.87824.45693.2679.97
Dividend per Share12.257.51011117.502.25
Dividend payout13.5910.2912.3821.5512.27(5.18)6.10
ROE11.868.929.165.678.67(16.66)14.84
ROCE6.964.904.612.793.97(6.99)6.52
ROA4.833.213.291.952.89(4.87)4.42
Asset turnover56.2263.5864.9866.1961.5351.1464.62
Debt to Equity0.630.680.841.061.031.331.36

Future Prospectus  :  For any economy which is growing, Steel is important resource. The promoter Sajjan Jindal know how to run the company and what not to do. and as they say Good promoter is all you need. I don’t need to say anything else

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter