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Prabhudas Lilladher Report
JSW Steel Ltd. reported better than estimated earnings for Q1 FY22 with a beat of 7%/14% on our and consensus estimates.
Higher steel margins and better performance in domestic and overseas subsidiaries drove JSW Steel’s beat.
We increase our Ebitda estimates for FY22E/FY23E by 4.7%/17.5% to factor in higher steel margins and better profitability in subsidiaries.
We expect that steel prices would structurally remain elevated in medium term as a result of inevitable policy measure undertaken by China to restrict production in order to curb alarming pollution levels.
Regular monitoring of output, stringent penalties for violation and continuous news flow on imposition of export tax to enhance availability in domestic markets would support steel prices in short term.
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