Detailed Narrative
Macro Environment & Industry Trends
The global steel market faced challenges from record Chinese steel exports, reaching 119 million tons in calendar year 2025, which led to the imposition of tariff and non-tariff barriers by several countries. Domestically, India's crude steel production rose 2% QoQ to 42.5 million tons, while demand increased by 0.5% to 40.7 million tons. India turned into a net steel exporter for the first time in 6 quarters, with net exports of 0.8 million tons, driven by a 30% increase in exports and a 36% reduction in imports. Domestic steel prices corrected in Q3FY26 due to weak demand and Chinese imports, but showed recovery from mid-December 2025.
Q3 FY26 Operational Performance
Jindal Steel demonstrated strong operational performance in Q3 FY26, with total production increasing 25% QoQ to 2.51 million tons and sales volume rising 22% QoQ to 2.28 million tons. This growth was primarily supported by the ramp-up of BF2 and BOF2 facilities at Angul. Additionally, the newly commissioned Bhagavati Subhadrika Blast Furnace-II achieved a capacity utilization of 48% in Q3FY26, with an exit run rate of 58%.
Project Updates & Capacity Expansion
The company achieved significant project milestones, operationalizing SBPP Module 1 (525 MW) and synchronizing SBPP Module 2 (525 MW) in January 2026, completing the turnaround of the 1,050 MW power plant acquired under IBC. CCL1, with a capacity of 0.2 million tons per annum, was also commissioned in January 2026. The 3 million tons per annum basic oxygen furnace 3 at Angul remains on track for commissioning by Q4FY26, which will increase steelmaking capacity to 15.6 million tons. The Utkal B1 mine has been opened, and overburden removal is currently underway.
Financial Performance & Profitability Drivers
Consolidated gross revenue for Q3FY26 increased 12% QoQ to INR 15,172 crores, driven by higher sales volume despite weaker steel prices. Adjusted EBITDA was Rs. 1,593 crores, translating to an EBITDA per ton of Rs. 6,981. Excluding a one-time📎 BF2 start-up cost of INR 350 crores, the underlying EBITDA per ton would have been Rs. 8,516. Consolidated PAT post this one-time📎 cost was INR 189 crores. The blended steel NSR was down by approximately Rs. 3,000 per ton QoQ, primarily due to a product mix skewed towards HRC and lower by-product sales.
Cost Structure & Outlook
Coking coal consumption costs increased by $2 per ton QoQ in Q3FY26, and the BF2 ramp-up utilized higher-cost bought-out coke. However, with the commissioning of an additional coke oven battery in November 2025, coke costs are expected to normalize📎. For Q4FY26, coal consumption costs are projected to rise by $18-$20 per ton sequentially. Despite this, domestic steel prices have already increased by Rs. 3,000-Rs. 3,500 per ton since December 2025, suggesting a favorable price-cost dynamic and expected improvement in Q4 performance.
Capital Allocation & Debt Profile
The company invested Rs. 2,076 crores in CAPEX during Q3FY26, bringing the cumulative CAPEX for the current expansion program to Rs. 32,925 crores against a total announced CAPEX of Rs. 47,043 crores. Consolidated net debt stood at Rs. 15,443 crores as of December 31, 2025, an increase of Rs. 1,287 crores sequentially. The net debt to EBITDA ratio was 1.72x, which management attributes to the culmination of the project phase and expects to reduce to sub-1.5x levels as capacities stabilize and ramp up.