JSW Steel — Q1 FY26 earnings call

Call held 18 Jul 2025

Management summary

JSW Steel reported solid Q1 FY26 with 14% production growth driven by JVML ramp-up, though margins benefited from Rs.3,300 blended realization improvement and lower coking coal costs ($14 decline). The BPSL Supreme Court judgment rejecting JSW's resolution plan was a significant negative, but management filed review petition with status quo maintained. Q2 outlook shows softer steel prices from June but lower raw material costs partially offsetting.

Highlights

  • Consolidated production of 7.26 MT, up 14% YoY; sales of 6.69 MT, up 9% YoY

  • Domestic sales grew 12% YoY, outpacing India's 7.9% demand growth

  • EBITDA of Rs.7,576 crores; margin 17.6%; PAT Rs.2,209 crores

  • VASP share improved to 64% from 60% previous quarter; auto sales highest ever up 20% YoY

  • Captive iron ore consumption at 39% during the quarter

  • JVML producing ~0.75 MT in Q1; second converter commissioning in Q2

  • BPSL Supreme Court ruling against JSW; review petition filed June 25 with status quo ordered

  • Q2 guidance: coking coal down ~$5; steel prices softer in June-July; iron ore costs declining

Concerns

  • BPSL Supreme Court ruling rejecting JSW's resolution plan

Key financials

  1. Revenue ₹43,147 Cr
  2. EBITDA ₹7,576 Cr
  3. EBITDA Margin 17.6%
  4. PAT ₹2,209 Cr
  5. Production 7.26 million tonnes +14%YoY
  6. Sales 6.69 million tonnes +9%YoY
  7. Net Debt ₹79,850 Cr
  8. Capex Q1 ₹3,400 Cr

What they filed

Q1 FY27: revenue up 9.8%, net profit up 112.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue39,684 41,378 44,819 43,147 45,152 +14%45,991 +11%51,180 +14%47,364 +10%
EBITDA5,375 5,579 6,135 7,476 7,027 +31%6,379 +14%8,464 +38%9,285 +24%
Net profit404 719 1,501 2,209 1,646 +307%2,410 +235%19,243 +1182%4,696 +113%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Indian Operations
    ₹7,496 Cr EBITDA18.5% Margin
  • Overseas Operations
    ₹187 Cr EBITDA
  • US - Baytown
    $19 Mn EBITDA

Guidance & targets

Cost

  • Q2 Coking Coal Cost Cost · Q2 FY26 · High confidence -$5/tonne
    coking coal costs to be marginally lower QoQ up to about USD5 per ton

    — Jayant Acharya

  • JVML Cost Advantage Cost · FY26-27 · Medium confidence Up to Rs.1,500/tonne further improvement
    Maybe we would see up to Rs1,500 further improvement on the JVML operations per tonne

    — Jayant Acharya

Pricing

  • Q1 Blended Price Improvement Pricing · Q1 FY26 · High confidence +Rs.3,300/tonne QoQ
    on a blended basis, we were able to get close to Rs.3,300 on realizations improvement

    — Jayant Acharya

Demand

  • India Steel Demand Growth Demand · FY26 · High confidence 8.5-9.5%
    CRISIL has already forecasted demand growth in the range of 8.5% to 9.5%

    — Jayant Acharya

Risks & concerns

  • BPSL Supreme Court ruling rejecting JSW's resolution plan

    high

    Supreme Court on May 2 rejected plan and directed refunds; review petition filed June 25; status quo ordered till review decided

    Management acknowledged

  • Steel prices moderating in June-July after March-May improvement

    medium

    HRC prices moderated Rs.1,500 in June with some July softness; cheaper imports and monsoon seasonality

    Management acknowledged

  • Low-priced imports remain concern despite safeguard duty erosion

    medium

    Changes in global trade flows from tariff uncertainties redirecting steel to India market

    Both acknowledged

  • Forex loss of Rs.343 crores from sharp Euro appreciation

    low

    Abnormally sharp EUR appreciation against INR March vs June impacting foreign currency loan translation

    Management acknowledged

Areas of evasion (2)

  • BPSL details beyond legal status
  • Exact quarterly pricing outlook

Q&A highlights

2 direct
JVML EBITDA differential vs Vijayanagar Direct
JVML operations at Vijayanagar to be better...Maybe we would see up to Rs1,500 further improvement per tonne

Quantifies the structural cost advantage from larger, more efficient blast furnaces - key to margin expansion thesis

Asked by Amit Dixit

Slurry pipeline timeline and cost savings Direct
190 kilometers already under the ground...start by March or April 2027...cost saving will be up to Rs1,000 per tonne on per tonne of iron ore

Rs.1,000/tonne iron ore saving from slurry pipeline is significant cost lever expected FY28

Asked by Sumangal Nevatia

BPSL legal remedies and asset control Partial
we have strong grounds for availing all legal remedies...from a control perspective, we still have control of the assets

BPSL situation subjudice but operations continue; no equity infusion or loans extended beyond initial plan

Asked by Multiple

1 min read 4 chapters

Detailed narrative

Solid Q1 Despite BPSL Overhang

JSW Steel delivered 14% production growth and Rs.3,300/tonne realization improvement benefiting from safeguard duty and seasonal demand. VASP share at 64% with auto sales at all-time high (+20% YoY). Overseas ops turned positive with Rs.187 crore EBITDA vs Rs.39 crore loss previously. Net debt up Rs.3,300 crore QoQ mainly from working capital buildup.

BPSL Legal Challenge

Supreme Court on May 2 rejected JSW's resolution plan for BPSL and directed refunds. JSW filed review petition June 25; status quo ordered. No equity infusion or loans extended to BPSL beyond initial plan. All investments were from BPSL's own internal accruals. Operations continue normally with ~1 MT/quarter production.

Capacity Expansion and Cost Structure

JVML produced 0.75 MT in Q1 with second converter due Q2. BF-3 shutdown planned September for 1.5 MT capacity upgrade. JVML expected to deliver Rs.1,500/tonne cost advantage from larger, more efficient BFs. Dolvi Phase-3 (10→15 MT) on track for Sep 2027. Board approved CRNO facility at Vijayanagar (55K tonnes).

Raw Material Strategy

Captive iron ore at 39% of consumption in Q1 with 15 MT Karnataka production target for FY26. 3 new Karnataka mines commissioning Q2. Goa Cudnem mine starting Q3. Slurry pipeline 190 of 300 km done, starting Mar/Apr 2027 with Rs.1,000/tonne iron ore cost saving. Coking coal declined $14 QoQ with further $5 decline expected Q2.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Metals & Mining earnings calls