Jindal Stainless Q1 FY27 earnings call

Jindal Stainless Limited reported a resilient Q1 FY27 performance with revenue growing 10.5% YoY, EBITDA up 1.4% YoY, and PAT increasing by 7.7% YoY. This was achieved despite a challenging operating environment, including industrial gas supply constraints and logistics uncertainties due to the Middle East crisis. These factors led to a 7.3% YoY decline in finished goods sales volume. The company focused on a value-added product mix and thinner product segments to maintain profitability.

Building on its strategic brand transformation initiated last year, JSL launched a nationwide print and television campaign featuring brand ambassador Ranveer Singh, significantly enhancing brand visibility. The company also amplified its engagement through associations with Sunrisers Hyderabad and strategic partnerships with Jio Hotstar and Star Sports as the official Super 6 partner. These initiatives aim to strengthen top-of-mind recall, support channel partners, and enhance long-term brand equity as consumption-led applications of stainless steel scale up across India.

JSL continues to make steady progress on its decarbonization roadmap, achieving a 12% year-on-year reduction in greenhouse gas emission intensity at its Hisar facility. This was enabled by upgrading to energy-efficient ancillaries and commissioning advanced waste heat recovery systems. The company is also diversifying its energy mix by introducing pipe natural gas to its Jajpur plant and expanding green hydrogen capacity, with 600 Nm cube at Jajpur commissioning this month and another 200 Nm cube at Hisar in the next two quarters.

The company reported a stronger balance sheet at the end of Q1 FY27, with consolidated net debt reduced to INR 2,950 crores. This resulted in a net debt-to-EBITDA ratio of 0.53x and a net debt-to-equity ratio of 0.14x, reflecting prudent fiscal management. All announced capex plans, including downstream expansion projects in Jajpur, Hisar, and Kharagpur, are on track. The FY27 capex plan is around INR 2,400-2,600 crores, primarily focused on creating more value-added products and increasing downstream cold rolling capacities from 2 million tons to 2.67 million tons by next year.

Despite global trade headwinds, regulatory challenges^🌐, and geopolitical developments, JSL demonstrated strong execution in exports, delivering robust volumes quarter-on-quarter. The company is maintaining its focus on expanding into new markets such as Japan, South Korea, European Union, and the Americas. Exports are maintained at around 11% of sales volume, with a strategy to maximize EBITDA by selling limited, high-margin products in these new geographies, as domestic market remains a priority.

JSL is actively engaged in dialogues with the government regarding antidumping duties (ADD) and Quality Control Orders (QCO). A public hearing for ADD is scheduled for September 9, and the company expects more clarity in the coming months^⏳. Management believes the government understands the importance of QCO for good quality material and expects the current QCO extension until March '27 not to be reversed. Regarding CBAM, JSL is ready with internationally accredited verifiers, awaiting the EU's appointment of verifiers, and is confident in meeting quota requirements.

The 1.2 MTPA stainless steel melt shop in Indonesia has started ramping up, with sales volumes expected to gradually increase after local approvals and certifications. Effective July 1, 2026, PTGMI, the Indonesian entity, transitioned from a subsidiary to an associate. This change was made as JSL had taken Board control during the construction phase to ensure timely project completion, but now that it's operational, partners are well-equipped to run it efficiently. Consequently, PTGMI's financials will now be recorded as a share of profit or loss in JSL's books, rather than line-by-line consolidation.