Jindal Steel: record revenue, but margin compression caps PAT growth at 21% YoY

Jindal Steel's consolidated revenue from operations hit a record ₹16,678.54 Cr (₹19,448 Cr gross, including GST) for Q2FY27, up 42.7% YoY and 7.7% QoQ, on record second-quarter steel sales of 2.38 MT (+27% YoY per the company). Consolidated PAT came in at ₹770.64 Cr (₹774.43 Cr attributable to owners), up 21.3% YoY but down 8.7% QoQ from ₹843.80 Cr in Q1FY27 — profit growth trailed revenue growth by roughly 21 percentage points. No exceptional items hit this quarter or the year-ago comparator, so the YoY move sits on a clean base. Standalone tells a different story: parent-only PAT actually fell 6.5% YoY to ₹860.65 Cr (from ₹920.67 Cr) even as standalone revenue grew a slower 26.1% YoY to ₹15,270.45 Cr — the consolidated profit beat is coming from subsidiaries, not the parent.

The headline number masks margin compression. Company-reported adjusted EBITDA was ₹2,504 Cr, a 14.99% margin on net revenue, down from 17.21% in Q1FY27 and roughly 16.0% a year ago. Depreciation rose 26.3% YoY to ₹947 Cr and net finance cost jumped 52.6% YoY to ₹566 Cr as capex (the Barbil-Angul slurry pipeline, Paradip Port, Angul expansion) landed on the balance sheet, eating into EBITDA growth (+34% YoY by the company's own count) before it reached PAT. Tax of ₹312.92 Cr on PBT of ₹1,083.56 Cr (effective rate ~28.9%) was broadly in line with prior quarters.

The stock went into the print at ₹1,014, down 11.1% over the past month of trading.

For context: revenue is at a 6-quarter high.

Consolidated basic EPS ₹7.61 vs ₹6.28 YoY, ₹8.30 QoQ

Management had guided 'from Q2' savings of ₹700/ton once the Barbil-Angul slurry pipeline was commissioned — the 192 km, 18 MTPA pipeline was indeed commissioned this quarter (also the basis of a Guinness World Record for an associated steel-slag road), but the targeted margin uplift is not visible yet; the quarter instead shows sequential margin compression. Our pre-result preview had flagged an 18-19% EBITDA margin target versus Q1's 17.2%; the actual ~15% margin misses that bar, even as revenue (₹16,678.54 Cr vs. the ~₹15,500-15,800 Cr expected) and volume (2.38 MT vs. 2.2-2.3 MT expected) both beat. Net debt/EBITDA improved to 1.51x from 1.71x in Q1FY27 — just above the <1.5x-by-Q2FY27 target management set on the last call, effectively on track. FY27 volume guidance of 10.5-11M tons remains broadly on pace: H1FY27 sales of 4.61 MT imply H2 needs to average roughly 2.95-3.2 MT a quarter, in line with the record 2.38 MT already posted. The quarter also carried a board-approved ESOP grant of 6.75 lakh options and the commencement of commercial operations at Jindal Paradip Port (Oct 15, 2026), which should start contributing from Q3FY27.