Net profits for the June quarter fell by nearly 56% for JSW Steel to Rs.1028 crore as volumes suffered due to weak steel demand. This was reflected in the total revenues of the company falling by 3.4% to Rs.19,812 crore. The EBIT margins actually fell by 610 basis points to 18.76% and that is likely to hit the company valuations substantially. The inventory days have increased from 20 days to 25 days showing a clear trend towards weak demand in the steel markets. This is a problem across the steel industry. Overall, inventory losses of Rs.164 crore also impacted the profits of the company.

The JSW Steel is currently quoting at its 52 week low and is available at less than 8X past earnings. But you must have seen in the past that such low valuations can be sustained for a very long time if the margins remain weak and the sales do not pick up. That is likely to sustain for now. You should ideally wait for the steel cycle to again pick up before committing funds. In your case, you can take a call based on your purchase price.