Jindal Steel

Jindal Steel & Power reported its highest ever production and sales in FY25, with crude steel production growing 2% YoY to 8.12 million tonnes and sales up 4% YoY to 7.97 million tonnes. For Q4 FY25, production increased 6% QoQ to 2.11 million tonnes, and sales volume rose 12% QoQ to 2.13 million tonnes. Consolidated gross revenue for the quarter reached INR 15,525 crores, a 13% QoQ increase, primarily driven by strong volumes. Adjusted PAT for Q4 FY25 stood at INR 1,099 crores, up 16% QoQ, after adjusting for one-off^📎 items.

The company demonstrated robust working capital management, achieving a reduction of INR 2,701 crores in Q4 FY25 and INR 3,146 crores for the full FY25. These efforts led to a significant improvement in the net debt to EBITDA ratio, which decreased from 1.40 in the previous quarter to 1.26. Management emphasized that these working capital initiatives are sustainable and represent a permanent improvement, contributing to the company's financial strength despite ongoing capital expenditure.

Jindal Steel is on track with its major expansion projects. Commissioning activities for Angul Blast Furnace 2 (BF2) have commenced, with the first hot metal expected in Q1 FY26. Other key projects, including BOF2, slurry pipeline, and Shree Bhoomi Power Plant, are progressing as per schedule, with BOF2 expected to be operational in Q2 FY26 and slurry pipeline benefits anticipated in H2 FY26. The total capex incurred in the current program, including sustenance, amounts to INR 25,924 crores, with INR 19,137 crores remaining for balance outstanding capex (excluding JV investments).

The company has secured mine opening permission for Utkal B1 mines, which hold approximately 148 million tonnes of reserves with an annual EC of 5.5 million tonnes, and expects mining to commence in H1 FY26. Additionally, Jindal Steel won the Saradhapur Jalatap East coal block. For Q1 FY26, coking coal consumption costs are projected to be lower by $10-$15 per tonne, while iron ore costs are expected to trend with domestic steel prices, contributing to cost optimization efforts.

The company has restarted its annual volume guidance, targeting crude steel production of 9-10 million tonnes and sales volumes of 8.5-9 million tonnes for FY26. Management described this guidance as conservative, expressing confidence in exceeding these targets. Upon full commissioning of all facilities, the company aims for an exit product mix of approximately 70% flats and 30% longs, an improvement from the FY25 mix of 40-60%, though this mix may be realigned based on market needs.

Q4 FY25 included INR 231 crores in one-off^📎, non-recurring^📎 expenses, covering provisions for old GST input credits, aged operational advances, inventory cleanups, carbon credit purchases for Australian operations, deallocated mines, and old insurance receivables. Furthermore, the company recorded an impairment of INR 1,229 crores (USD 144 million) for its overseas assets, primarily Australian assets under care and maintenance, based on an independent valuation, with the remaining value estimated at USD 150 million.

India remained a net importer of steel in FY25, with 4.3 million tonnes of net imports, influenced by weakening Chinese demand and high exports impacting global prices. The government's introduction of a 12% safeguard duty for 200 days on select steel imports is expected to help curb cheap steel inflows and support domestic consumption. Management anticipates flat product prices to remain stable due to this duty and does not foresee a significant further drop in Chinese steel prices, supported by upward trends in other global markets.