JSW Group's Steel Business Signs EUR 143 Million Development Contract To Modernise Rail Mill, Gets EUR 33 Million Grant, Plans To Double Capacity And Produce 120-Meter Head-Hardened Rails

With a PE ratio of 70.4, the company trades at a premium compared to the industry PE of 17.6. The company has ROCE of 13.3 per cent and ROE of 11.8 per cent.

JSW Steel Italy Piombino S.P.A. (JSW Italy), a wholly owned subsidiary of JSW Steel Limited produces and distributes rails through its rail mill plant at Piombino in Italy having a capacity of producing 0.32 MTPA rails.

JSW Italy today signed a Development Contract with the Ministry of Enterprise & Made in Italy(MIMIT), the Tuscany Region and l’Agenzia Nazionale per l’Attrazione Degli Investimenti e lo Sviluppo d’Impresa S.p.A. (INVITALIA). The Development Contract is in line with the MoU dated March 1, 2024 signed between JSW Steel Italy SrL, the parent entity of JSW Italy and the MIMIT, intended to revive the historically important industrial site ‘Steelworks of Piombino’, by way of modernisation of the facilities and enhancement of industrial activity.

As per the Development Contract, JSW Steel Italy Piombino S.P.A. is being provided a Grant of Euro 33 Mn from the Italian Government through INVITALIA. The amount of Euro 33 Mn. consists of the Grants being allocated towards the development of the Rail Mill Modernisation Project being implemented by JSW at Piombino at an estimated project cost of Euro 143 Mn. This project will nearly double the capacity of the Rail Mill from around 0.32 MTPA to 0.6 MTPA which will also enable JSW Italy to enhance the length of the rails being made at JSW Italy from 108 meters to upto 120 meters. This project will also make the JSW Italy rail facilities ‘best in the class’ and will also provide unique capability to make technologically sophisticated ‘Head Hardened’ rails at Piombino which will provide access to the European Head Hardened rail market. The Development Contract is binding on all parties and the receipt of Grants under this Contract is subject to customary conditions precedent as per the prevailing Italian law. This Contract further reinstates the commitment of JSW Italy, MIMIT, Tuscany Region and INVITALIA towards the growth, revival and economic development of the Piombino region.

JSW Steel is primarily engaged in the business of manufacture and sale of Iron and Steel Products. It is the flagship business of the diversified, US$ 23 billion JSW Group.The Group has interests in energy, infrastructure, cement, paints, sports, and venture capital.

In the Quarterly Results of December 2024, the company reported a revenue of Rs 41,378 crore, reflecting a YoY decline of 1.34 per cent compared to Rs 41,940 crore in December 2023. The operating profit stood at Rs 5,579 crore, marking a 22.12 per cent decrease from Rs 7,164 crore in the same quarter last year. The profit after tax (PAT) declined by 70.31 per cent to Rs 717 crore from Rs 2,415 crore in December 2023.

In FY24, the company posted a revenue of Rs 1,75,006 crore, registering a 5.45 per cent growth compared to Rs 1,65,960 crore in FY23. The net profit for the year stood at Rs 8,812 crore, up 112.64 per cent from Rs 4,144 crore in the previous financial year.

With a PE ratio of 70.4, the company trades at a premium compared to the industry PE of 17.6. The company has ROCE of 13.3 per cent and ROE of 11.8 per cent.

Investors must keep this Large-Cap stock on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.