JSW Steel — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

JSW Steel closed FY25 with record production and sales, achieving 98% of guidance. Q4 saw EBITDA of Rs.6,378 crores with margins impacted by low exit prices in December but improving from February. The BPSL Supreme Court judgment was a major negative but management expressed confidence in legal remedies. FY26 outlook is positive with 10% volume growth guidance, JVML ramp-up delivering Rs.2,500/tonne cost advantage, and Rs.3,200+ price recovery in Q1. Government's 12% safeguard duty from April 2025 provides domestic support.

Highlights

  • Highest ever quarterly production at 7.63 MT (+12% YoY, +9% QoQ); full year 27.8 MT highest ever

  • Highest ever quarterly sales at 7.49 MT (+11% YoY, +12% QoQ); full year 26.5 MT highest ever

  • Consolidated EBITDA Rs.6,378 crores; margin 14.2%; PAT Rs.1,501 crores (doubled QoQ)

  • India steel consumption grew 11.5% to 152 MT in FY25 - fourth year of double-digit demand growth

  • JVML BF at 90%+ utilization in March; second converter expected Q2 FY26

  • Coking coal costs down $15 in Q4 as guided; Q1 FY26 expected further $10-15 decline

  • FY26 guidance: production 30.5 MT, sales 29.2 MT (~10% growth); prices up Rs.3,200-3,250 in Q1

  • Net debt fell Rs.4,350 crores on better cash generation; FY25 capex Rs.15,000 crores

Concerns

  • BPSL Supreme Court judgment rejecting resolution plan

  • Net debt/EBITDA at 3.34x - 5-year high

Key financials

3 periods

Headline

  • Revenue
    ₹44,819 Cr
  • EBITDA
    ₹6,378 Cr
  • EBITDA Margin
    14.2%
  • PAT
    ₹1,501 Cr
  • VASP Share FY25
    62%

Q4

  • Production
    7.63 million tonnes
    YoY +12% QoQ +9%
  • Sales
    7.49 million tonnes
    YoY +11% QoQ +12%

FY25

  • Production
    27.8 million tonnes
  • Sales
    26.5 million tonnes
  • Capex
    ₹15,000 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
    32% Captive Iron Ore
  • US - Baytown
    $4.4 Mn EBITDA
  • US - Ohio
    $-7.5 Mn EBITDA
  • BPSL
    1 million tonnes Q4 Production

Guidance & targets

Volume

  • FY26 Production Volume · FY26 · High confidence 30.5 million tonnes
    we expect our consolidated production to be at about 30.5 million tonnes

    — Jayant Acharya

  • FY26 Sales Volume · FY26 · High confidence 29.2 million tonnes
    sales at 29.2 million tonnes

    — Jayant Acharya

Cost

  • Q1 FY26 Coking Coal Cost · Q1 FY26 · High confidence -$10-15/tonne
    coking coal costs to be lower by around USD10-15 per tonne in Q1 FY26

    — Jayant Acharya

  • JVML Cost Advantage Cost · FY26 · High confidence Rs.2,500/tonne lower conversion cost
    significantly lower conversion cost compared to our existing operations by around Rs2,500 per ton

    — Jayant Acharya

Pricing

  • Q1 FY26 Price Improvement Pricing · Q1 FY26 · High confidence +Rs.3,200-3,250/tonne
    Rs.3,200 to Rs.3,250 per tonne price improvement between Q4 FY25 and Q1 of FY26

    — Jayant Acharya

Demand

  • India Steel Demand Growth Demand · FY26 · High confidence 8-10%
    We expect the growth in FY26 also to be strong and in the range of 8% to 10%

    — Jayant Acharya

Risks & concerns

  • BPSL Supreme Court judgment rejecting resolution plan

    high

    Court directed refund of amounts paid to creditors; JSW filing review petition; status quo on operations maintained

    Management acknowledged

  • Net debt/EBITDA at 3.34x - 5-year high

    high

    Management guided ratios will remain manageable with JVML ramp-up and BPSL deleveraging

    Analyst acknowledged

  • Steel imports rose 9.2% while exports fell 27% in FY25

    medium

    India net importer for second year; 12% safeguard duty from April 2025 to address unfair trade

    Management acknowledged

  • Captive iron ore share dropped to 32% in Q4 from Jajang mine surrender

    low

    3 new Karnataka mines and Goa mines to offset; FY25 average at 37% captive; FY26 targeting 15 MT from Karnataka

    Analyst acknowledged

Areas of evasion (3)

  • BPSL financial details
  • Refund mechanism details
  • Timeline for legal resolution

Q&A highlights

2 direct
BPSL legal position and asset control Partial
we have implemented the resolution plan in full compliance with the laws...we see a strong ground for availing all the legal remedies

Supreme Court rejected BPSL plan; management unable to detail next steps but confirms operational control continues

Asked by Amit Dixit

JVML cost advantage quantification Direct
larger blast furnaces...more efficient in terms of fuel consumption. The fixed costs are lower...Power costs are lower

Rs.2,500/tonne structural cost advantage from JVML is primary margin expansion driver for FY26

Asked by Ashish Jain

Balance sheet leverage trajectory Direct
net debt-to-EBITDA at 3.34x...we do not believe this leverage will increase beyond levels which are uncomfortable for the company

Leverage at 5-year high of 3.34x needs improvement; BPSL cash inflows and JVML EBITDA critical for deleveraging

Asked by Parthiv Jhonsa

1 min read 4 chapters

Detailed narrative

Record FY25 Capped by Q4 Margin Pressure

JSW Steel achieved highest-ever annual production of 27.8 MT and sales of 26.5 MT, hitting 98% of guidance. Q4 EBITDA of Rs.6,378 crores benefited from $15 coking coal decline but impacted by low Dec exit prices; PAT doubled QoQ to Rs.1,501 crores. Highest-ever institutional and sectoral sales across auto, renewables and appliances.

BPSL Legal Setback

Supreme Court's May 2 judgment rejecting JSW's BPSL resolution plan was the quarter's biggest negative. Management confirmed no equity infusion or loans to BPSL beyond initial plan; all capex from BPSL internal accruals. Review petition filed; status quo on operations. BPSL now at 4.5 MT capacity producing ~1 MT/quarter.

FY26 Volume and Margin Outlook

Management guided 30.5 MT production and 29.2 MT sales for FY26 (~10% growth). Key drivers: JVML adding ~3.5 MT incrementally with Rs.2,500/tonne cost advantage, BF-3 shutdown for upgrade offset by other capacity improvements, BPSL near full capacity. Q1 FY26 to benefit from Rs.3,200+ price recovery and $10-15 coking coal decline.

Strategic Initiatives

GreenEdge low-emission steel brand launched with 1 MT CO2 savings certified. 4 plants received ResponsibleSteel certification. JVML BF at 90%+ utilization. 1 GW renewable energy target being completed this quarter. FY25 capex of Rs.15,000 crores. India steel demand projected 8-10% growth for FY26.

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