Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>JSW Steel has released Q2/24-25 numbers that were weaker than expected in our view, with a yoy decline in revenue, significantly larger decrease in earnings, material negative FCF (owing to lower steel prices) and narrower margins (due to a surge in cheap imports, particularly from China).</li>
<li>The balance sheet deteriorated, with debt increasing and earnings softening. Liquidity also weakened.</li>
<li>While the company has guided for improvement in H2/24-25, it did not provide credible justification for this during the earning call besides noting that JSW raised selling prices in October 2024. </li>
</ul>


JSW Steel has released Q2/24-25 numbers that were weaker than expected in our view, with a yoy decline in revenue, significantly larger decrease in earnings, material negative FCF (owing to lower steel prices) and narrower margins (due to a surge in cheap imports, particularly from China).
The balance sheet deteriorated, with debt increasing and earnings softening. Liquidity also weakened.
While the company has guided for improvement in H2/24-25, it did not provide credible justification for this during the earning call besides noting that JSW raised selling prices in October 2024. 


JSW Steel - Earnings Flash - Q2 FY 2024-25 Results - Lucror Analytics

Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-18561'>JSW Steel Ltd</a></li><li><a href='#lucror-entity-18262'>Vista Land & Lifescapes</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.JSW Steel LtdVista Land & Lifescapes

Morning Views Asia: JSW Steel Ltd, Vista Land & Lifescapes

While JSW Steel's Q4/23-24 results were soft in our view, the full-year numbers were decent. Operational stats remained robust. The share of value-added products was high and continued to increase. The financial risk profile was unchanged q-o-q, but improved significantly from FYE 2022-23. However, liquidity deteriorated and was barely adequate. We expect a stronger FY 2024-25 with higher revenue and earnings, as the steel operating environment appears to have bottomed out. Steel prices should remain stable, with possible upside. That said, the higher earnings could be offset by an increase in debt to cover the large and growing capex.

  While JSW Steel's Q4/23-24 results were soft in our view, the full-year numbers were decent. Operational stats remained robust. The share of value-added products was high and continued to increase. The financial risk profile was unchanged q-o-q, but improved significantly from FYE 2022-23. However, liquidity deteriorated and was barely adequate.   We expect a stronger FY 2024-25 with higher revenue and earnings, as the steel operating environment appears to have bottomed out. Steel prices should remain stable, with possible upside. That said, the higher earnings could be offset by an increase in debt to cover the large and growing capex. 

JSW Steel - Earnings Flash - FY 2023-24 Results - Lucror Analytics

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-18561'>JSW Steel Ltd</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.JSW Steel Ltd

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Commodities

<ul>
<li>We summarize the sensitivity of high-yield stocks <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" rel="noopener">Vale (VALE US)</a> and <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" rel="noopener">Fortescue Metals (FMG AU)</a> to the iron ore price. We try to answer what's priced in at 100 USD/ton.</li>
<li>We provide sensitivity tables for both stocks based on a range of 90-130 USD/ton. At 100 USD/ton, <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)/Fortescue Metals (FMG AU)  </a> trade at 7.4/6.4% dividend yields.</li>
<li>Bullish iron ore participants subscribing to the 130 USD/ton forecast can see yields of 16.3%/11.4%. This forecast will be achievable if the China stimulus provides the expected impetus.</li>
</ul>


We summarize the sensitivity of high-yield stocks Vale (VALE US) and Fortescue Metals (FMG AU) to the iron ore price. We try to answer what's priced in at 100 USD/ton.
We provide sensitivity tables for both stocks based on a range of 90-130 USD/ton. At 100 USD/ton, Vale (VALE US)/Fortescue Metals (FMG AU)   trade at 7.4/6.4% dividend yields.
Bullish iron ore participants subscribing to the 130 USD/ton forecast can see yields of 16.3%/11.4%. This forecast will be achievable if the China stimulus provides the expected impetus.


High Yield Iron Ore Stocks: VALE US/FMG AU Sensitivity to Iron Ore

India

JSW Steel Limited is an integrated steel producer with manufacturing facilities in Karnataka, Tamil Nadu and the western state of Maharashtra. The Company produces products including hot rolled coils, cold rolled coils, wire rods, galvanized coils and sheets.

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JSW Steel Ltd (JSTL IN)

JSW Steel - Earnings Flash - Q2 FY 2024-25 Results - Lucror Analytics

JSW Steel has released Q2/24-25 numbers that were weaker than expected in our view, with a yoy decline in revenue, significantly larger decrease in...

Lucror Analytics

Morning Views Asia: JSW Steel Ltd, Vista Land & Lifescapes

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

JSW Steel - Earnings Flash - FY 2023-24 Results - Lucror Analytics

While JSW Steel's Q4/23-24 results were soft in our view, the full-year numbers were decent. Operational stats remained robust. The share of...

Lucror Analytics

Morning Views Asia: JSW Steel Ltd

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

High Yield Iron Ore Stocks: VALE US/FMG AU Sensitivity to Iron Ore

We summarize the sensitivity of high-yield stocks Vale (VALE US) and Fortescue Metals (FMG AU) to the iron ore price. We try to answer the question...

Sameer Taneja

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