Margin pressure offsets revenue growth; long-term value-shift intact

Confirmed at 66% vs 61% Q4FY26; product mix upgrade ongoing

₹2,667 Cr EBITDA with ₹11,937/ton per-ton EBITDA (+₹1,843/ton vs Q4)

Stated 11K achieved; monsoon ramp plan to 12K in Sep, 13K by Dec (not yet proven)

₹548 Cr finance cost charged to P&L (capitalized during Q4FY26 on BOF-3, CRM, 1,050MW power plant)

Q1 actual $23/ton increase reported; inline with guidance

V.R. Sharma returned as MD after 4-year gap. Rajiv Kumar (Tata, Vedanta) as COO; Sandeep Modi (Hindustan Zinc) as CFO. Focus on value-added products, cost discipline (E&I model).

Target 50% high-EBITDA products by capacity. Currently 66% value-added vs baseline commodity. Explicit move away from volume race.

Target ₹1,000/ton controllable cost reduction via yield, waste reduction, electricity efficiency. Aspiration, not committed.

Maintained 10.5–11M ton FY27 (vs prior 8.5–9M guidance era). Not raised despite 25.9% revenue beat, signaling caution on capacity utilization and monsoon headwinds.

Three focus: capacity utilization to 15.6 MTPA (using HBI/DRI/scrap), value-added products, and cost reduction. No incremental capex on commodity; E&I model: earn and invest only in value-added. Angul ramp from 11.5M → 12.5M → 13M tons step-wise.

BF-2 at 11K tpd now; ramp 12K Sep, 13K Dec post-monsoon. Slurry pipeline laid end-to-end; trials ongoing; expect first half Aug commissioning. 18M ton capacity (60% Fe, 35–40% water). Reduces transportation burden.

HRC down ₹800/ton vs Q1; TMT at ₹8,000 index (seasonal weakness). Recovery expected post-monsoon. Insulated via product mix; when TMT weak, shift to other segments.

$23/ton increase Q1 (guided $20–25/ton). Q2: ~$15/ton further increase expected, but blending and own mines (50% mix currently) to mitigate. Chinese factor could pressure prices down.

Yes, maintained. Q1 shutdown was BOF vessel refractory timing (not discretionary). New BOF-2/3 don't require shutdown; will recover 300K ton loss in subsequent quarters.

No metallics sales; for in-house use. Flats NSR +₹7,000/ton; longs +₹4,500/ton. Price-cost band typically 4–6 weeks; normal behavior. Value-added grades (rail, specialty plates) held prices better.

Acknowledged concern. Top 20 (CG0/CG1) had churn; 1,800–2,000 middle-management stable. Advisory board guides on transitions. New team brought (Rajiv Kumar, Modi, CHRO, VP HR) to stabilize. Aim to extend tenures.

Iron ore +₹500/ton, Middle East conflict +$12–13/ton impact, coking coal +$23/ton, operating leverage loss ₹2,000/ton (lower volume). Q2: coal headwind persists ($12–15/ton), but scale and no shutdown offset.

Slurry pipeline ₹700/ton from Q2; own coal mix ramp 50% → 40% iron ore backward integration; Utkal B1/B2 help; Jindal port loading started (2 vessels unloaded). Cannot quantify project-by-project; ramp phasing varies. ROCE 18–20% target implies savings embedded.

Controllable cost reduction (electricity, yield, waste) target ₹1,000/ton. Cannot split by project (slurry, coal, port) as ramp-up phased differently. Uncontrollable costs (coal, oil, iron ore) driven by NMDC/global prices.

Product-wise EBITDA not published (internal only). Overall shows range ₹7K–₹25K/ton EBITDA by product. Aim is 50% high-EBITDA products by year-end. Currently 30% of lower-EBITDA segment being converted to value-added grades.

Perfect balance expected. 4–6 week price-cost lag typical. Post-monsoon, no shutdown, operating leverage, and slurry pipeline benefit should offset price weakness. Expect EBITDA/ton stable ~₹12,000.

Maintained vs prior. Implies flat-to-down volume vs FY26 baseline (~10M tons). Focus on value-added, not tons.

Implicit: slurry pipeline (₹700/ton), operating leverage, cost reduction (₹1K/ton target) to offset coal inflation. Timeline Q2 onward.

Q1 spent ₹2K Cr. Disciplined, tied to E&I (earn-and-invest) model. No large incremental capacity expansion outside value-added.

Q1 coal cost +$23/ton expected to persist $12–15/ton in Q2. HRC prices firmer, but TMT (long products) down ₹8,000/ton in Jun-Jul. Monsoon seasonal.

Slurry pipeline target H1-Aug commissioning tight; monsoon delays possible. BF-2 ramp 13K tpd by Dec (post-monsoon) dependent on weather. ₹700/ton benefit assumes timeline.

Net debt/EBITDA 1.71x; target <1.5x by Q2FY27. Requires ₹1K+ Cr debt paydown or EBITDA growth. Interest rate negotiation (CFO Modi initiative) underway but timing uncertain.

New MD, COO, CFO, CHRO all in first 1–2 months. Analyst raised concern on frequent turnover. Middle-management stable (1,800–2,000) but execution depends on top-team integration.

Management target ₹1,000/ton cost reduction via yield, waste, electricity. No project-by-project breakdown given. Timeline phased through FY27–FY28. Aspiration, not committed.