Skip to content

    JSW Steel

    JSWSTEELMixed
    Metals & Mining·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

    8

    • 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

    1

    • BPSL Supreme Court ruling rejecting JSW's resolution plan

    What Changed1

    vs Q2 FY26

    Tone shiftGood → Mixed

    Key financials

    Single quarter

    08 metrics
    1. 01Revenue₹43,147 Cr
    2. 02EBITDA₹7,576 Cr
    3. 03EBITDA Margin17.6%
    4. 04PAT₹2,209 Cr
    5. 05Production7.26 MT+14.0%YoY

    Segment breakdown

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

    Guidance & targets

    4
    CategoryTargetPriority
    Cost
    Q2 Coking Coal Cost
    -$5/tonne
    		High
    Cost
    JVML Cost Advantage
    Up to Rs.1,500/tonne further improvement
    		Medium
    Pricing
    Q1 Blended Price Improvement
    +Rs.3,300/tonne QoQ
    		High
    Demand
    India Steel Demand Growth
    8.5-9.5%
    		High

    Risks & concerns

    6
    RiskSeverity

    BPSL Supreme Court ruling rejecting JSW's resolution plan

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

    high

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

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

    medium

    Forex loss of Rs.343 crores from sharp Euro appreciation

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

    low

    Low-priced imports remain concern despite safeguard duty erosion

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

    medium

    Areas of Evasion(2)

    • BPSL details beyond legal status
    • Exact quarterly pricing outlook

    Q&A highlights

    3

    “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

    1 min read4 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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).

    04

    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. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.