JSW Steel — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

JSW Steel delivered record Q2 FY26 results with highest-ever quarterly production and VASP sales amid seasonally weak monsoon quarter. Indian steel demand grew 8.9% YoY. JVML ramp-up and BPSL post-expansion drove strong volume growth. Management guided for H2 price improvement in November-December with coking coal cost up $3-5 QoQ. Board approved EAF project at Kadapa and CRGO expansion. Rs.69,000 crore capex planned over next 3.5 years at ~Rs.20,000 crore/year.

Highlights

  • Highest ever consolidated production at 7.9 MT, up 17% YoY and 9% QoQ

  • Highest Q2 consolidated sales at 7.34 MT, up 20% YoY and 10% QoQ despite monsoon

  • Adjusted EBITDA of Rs.7,849 crores; EBITDA/tonne Rs.10,701; margin 17.4%

  • VASP sales highest ever at 4.31 MT (64% of sales), up 20% YoY; auto sales at all-time high

  • India's first 25 MW green hydrogen electrolyser commissioned at Vijayanagar

  • BF-3 shutdown started end-September for 150-day capacity enhancement to 4.5 MT

  • Board approved 1 MT EAF at Kadapa, Andhra Pradesh by FY29; CRGO expansion to 250,000 tonnes at Nashik

  • Net debt at Rs.79,153 crores; net debt/EBITDA at 2.97x

Concerns

  • Domestic steel prices trading at discount to import parity despite safeguard duty

Key financials

  1. Revenue ₹45,152 Cr
  2. Adjusted EBITDA ₹7,849 Cr
  3. EBITDA/tonne ₹10,701/tonne
  4. PAT ₹1,646 Cr
  5. Production 7.9 million tonnes +17%YoY
  6. Sales 7.34 million tonnes +20%YoY
  7. Net Debt ₹79,153 Cr
  8. VASP Share 64%

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
    ₹7,614 Cr EBITDA₹10,768/tonne EBITDA/tonne18.1% Margin
  • US Operations
    $12.2 Mn EBITDA
  • Italian Operations
    5.6 million eur EBITDA

Guidance & targets

Cost

  • Q3 Coking Coal Cost Cost · Q3 FY26 · High confidence +$3-5/tonne
    we may see up to USD3 to USD5 increase in our coking coal cost

    — Jayant Acharya

Pricing

  • Q3 Steel Price Outlook Pricing · Q3 FY26 · Medium confidence Improvement in Nov-Dec
    we expect the prices to improve in November-December

    — Jayant Acharya

Capex

  • Planned Capex Capex · H2 FY26 + 3.5 years · High confidence Rs.69,000 crores
    approximately Rs.69,000 crores...approximately Rs.20,000 crores per year

    — Jayant Acharya

Demand

  • India Steel Demand Demand · FY26 · High confidence 8-9% growth
    Steel demand is projected to grow by 8% to 9% in this financial year

    — Jayant Acharya

Risks & concerns

  • Domestic steel prices trading at discount to import parity despite safeguard duty

    high

    Lumpy capacity additions and weak monsoon quarter drove prices below import parity; management expects H2 recovery

    Both acknowledged

  • Elevated Chinese steel exports impacting global pricing

    medium

    Chinese exports grew 18% Jan-Aug CY25; India imports spiked despite safeguard duty

    Management acknowledged

  • BF-3 shutdown for 150 days reducing production capacity

    medium

    Shutdown started end-Sep for upgrade from 3 to 4.5 MT; return to ops by Feb 2026

    Management acknowledged

  • Unrealized forex losses of Rs.734 crores on debt translation

    low

    Rupee depreciation from 85.50 to 88.79 creating Rs.2,100 crore debt translation impact

    Management acknowledged

Q&A highlights

3 direct
Domestic price discount to import parity Direct
prices have been softer in a seasonally weak quarter...we are reasonably optimistic that in a seasonally stronger second half, we will see improvement

Unusual discount signals capacity additions overwhelming near-term demand; key to margin trajectory

Asked by Sumangal Nevatia

Net debt trajectory and leverage targets Direct
below 3x is something we will aim to maintain even in future...absolute debt could go up or down

Net debt/EBITDA at 2.97x - close to comfort zone; management focuses on ratio not absolute debt

Asked by Indrajit Agarwal

CBAM strategy and European export exposure Direct
90% plus of our volumes have been in the domestic market...exposure for Europe is only about 2% to maybe 3%

European exposure minimal; manageable even with CBAM implementation

Asked by Vikash Singh

1 min read 4 chapters

Detailed narrative

Record Q2 Operational Performance

JSW Steel delivered highest-ever Q2 production of 7.9 MT (+17% YoY) and sales of 7.34 MT (+20% YoY) despite monsoon seasonality. JVML ramp-up contributed significantly with second converter starting in August. VASP sales hit record 4.31 MT constituting 64% of total. Domestic sales of 6.33 MT up 14% YoY, outpacing India's 8.9% demand growth.

Margin Resilience Through Product Mix

Despite declining steel prices, adjusted EBITDA/tonne remained healthy at Rs.10,701 supported by 64% VASP share, lower coking coal ($6 decline as guided), and improved operational leverage from higher volumes. Indian ops EBITDA margin at 18.1%. Energy costs lower from renewable energy commissioning of 885 MW.

Growth Strategy Acceleration

Board approved 1 MT EAF at Kadapa for structural steel by FY29 and CRGO capacity expansion at Nashik from 50K to 250K tonnes plus 100K at Vijayanagar. Rs.69,000 crore capex planned at Rs.20,000 crore/year funded through internal accruals. BF-3 shutdown for upgrade will add 1.5 MT by Feb 2026.

Raw Material Security Progress

Captive iron ore at ~30% of consumption with 22-23 MT annual availability annualized. 12 iron ore mines operating with 3 new Karnataka mines expected Q1 FY27. Goa mining at Cudnem starting Q3 FY26. Acquired 20% stake in Illawarra coking coal (Australia), increasing to 30%. Mozambique coking coal acquisition expected to close this FY.

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