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    JSW Steel

    JSWSTEELMixed
    Metals & Mining·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

    8

    • 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

    2

    • BPSL Supreme Court judgment rejecting resolution plan

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

    What Changed1

    vs Q1 FY26

    Guidance items4 → 6 (+2)
    Key financials

    Metrics

    10

    Periods

    3

    Headline

    5
    • Revenue
      ₹44,819 Cr
    • EBITDA
      ₹6,378 Cr
    • EBITDA Margin
      14.2%
    • PAT
      ₹1,501 Cr
    • VASP Share FY25
      62%

    Q4

    2
    • Production
      7.63 MT
      YoY+12%QoQ+9%
    • Sales
      7.49 MT
      YoY+11%QoQ+12%

    FY25

    3
    • Production
      27.8 MT
    • Sales
      26.5 MT
    • Capex
      ₹15,000 Cr

    Segment breakdown

    Indian Operations
    32% Captive Iron Ore
    US - Baytown
    4.4 Mn EBITDA
    US - Ohio
    -7.5 Mn EBITDA
    BPSL
    1 Mn Q4 Production
    List

    Guidance & targets

    6
    CategoryTargetPriority
    Volume
    FY26 Production
    30.5 million tonnes
    		High
    Volume
    FY26 Sales
    29.2 million tonnes
    		High
    Cost
    Q1 FY26 Coking Coal
    -$10-15/tonne
    		High
    Cost
    JVML Cost Advantage
    Rs.2,500/tonne lower conversion cost
    		High
    Pricing
    Q1 FY26 Price Improvement
    +Rs.3,200-3,250/tonne
    		High
    Demand
    India Steel Demand Growth
    8-10%
    		High

    Risks & concerns

    7
    RiskSeverity

    BPSL Supreme Court judgment rejecting resolution plan

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

    high

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

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

    high

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

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

    medium

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

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

    low

    Areas of Evasion(3)

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

    Q&A highlights

    3

    “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

    1 min read4 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    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.