Strong PAT but margin pressure; costs outpace price recovery

Revenue ₹47,364 Cr, adjusted EBITDA margin 19.8% — both match

OPM 19.8%, NPM 9.8%; costs rose (coking coal $17 vs $12-15 guided; Middle East ~$20/ton) and not fully recovered by pricing. Flat to compressing margins.

Actual increase ~$17/ton, higher than guidance range

Domestic volumes only 1% growth vs industry 8.3%; Institutional +5% but retail destocking offset by weak Longs (labor/fuel/imports)

Institutional sales 3.7MT, up 5% YoY; Auto sector up 18%; achievable given base effects and demand tailwinds

Prior call: cost rise +₹3k/ton offset by price, leading to margin expansion. Delivered: costs +$17/ton coking coal (vs $12-15), +$20/ton Middle East; prices down (TMT -₹7-8k/ton); OPM flat 19.8%.

Domestic +1% YoY vs industry +8.3%. Retail destocking, labor shortages (elections), import surge (22% QoQ). Institutional +5%, but insufficient offset.

India net importer again in Q1 (was net exporter in FY26 after safeguard duty). Imports from Japan, Russia, China up. Antidumping cases filed, but visibility on resolution unclear.

Prior: expected realization improvement. Delivery: management says 'difficult to guide' on pricing. Spot prices: flat prices -₹1k/ton, long prices (TMT) -₹7-8k/ton since Q1 start.

Special grades via RH facility now live; 2% Karnataka incentive raising EBITDA per ton; EBITDA per ton now aligned with standalone JSW. Cost leverage and volume ramp driving surprise.

Difficult to guide. Longs are seasonal (monsoon impact); flat prices reasonably priced. Expect normalization in H2 with good demand, project capex. No specific spread guidance.

Captive ~30% (including Netrabandha). Iron ore costs up ₹230/ton in Q1. Iron ore trending down now; relief expected late Q2/Q3.

No downstream facility added at Dolvi. Design change in raw material handling (double-conveyor vs single). Middle East conflict added costs. Capex per ton for 5MT facility still <₹5,000 Cr/MT; IRR remains strong.

~$20/ton industry-level impact (fluxes, marine fuel, container cost). Gases should reverse this quarter; most should normalize as war subsides. Moving daily average.

By CY28: ~50% captive coverage. Domestic 20%, Mozambique 20%, Australia 10%. Mozambique starts mid-2028 (7MT target eventually). Domestic 3-3.5MT from Parbatpur, Sitanala, linkages by CY28/29.

30MT capacity; intend to run 20MT. Cost saving ~₹1,000/ton of iron ore. FY28 onwards benefits start materializing.

Vijayanagar hosts JVML subsidiary. Inter-unit transfers between JSW Steel and JVML explain volume variance. Consolidated includes standalone, JVML, Raigarh, Salem; coated netted of intercompany.

~90% of auto price benefit already in Q1 results. 1-2 closures in process; will reflect in Q2. Cannot quantify exact benefit (varies by product/customer).

Imports up (Japan, Russia, China). Government investigating antidumping cases. Results difficult to predict; legal process ongoing. Antidumping can run parallel to safeguard (like US/Europe).

₹1.30T is currently approved capex (growth, mining, downstream, cost-saving). ₹2.26T is future long-term (62MT target); not yet board-approved. Will add projects (Odisha Phase II, Salav, POSCO expansions) as approved.

No further update. Gadchiroli under consideration for iron ore availability. Mining lease won in auction; early evaluation stage ongoing. Will provide updates when ready.

High-grade, specialty products (tinplate, color brands JSW Colouron, JSW Endura gaining premium). Cost efficiency measures across business. Range ₹5-6k/ton is good; zinc/aluminum prices a variable (recent spike from Middle East conflict).

BF-3 ramp, Ohio better leverage on cost. Iron ore down recently; benefit late Q2/Q3 offsets coking coal +$12-15/ton headwind. On price: uncertain; will circle back if anything to guide.

Flat steel spot ~₹1,000 lower (Mar exit vs Jun exit). TMT spots -₹7-8k/ton (Mar exit vs Jul). HR exit up ₹1k Q4→Q1, may moderate marginally.

Institutional +5% (3.7MT, best ever); retail lower (destocking + imports). Longs impacted (labor, fuel availability). Flats overall up 42% (including export). Alloy Steel special grew QoQ.

Dugdha washery fully acquired (owned & operated). 7.5MT linkage: 5MT linkage coal, 2.5MT captive. Full-scale benefit in 2 years. BCCL linkage auctions ongoing; will participate as available.

Special grades volume up (RH now live). Cost down (full capacity utilization, BF leverage). 2% incentive growing in absolute terms on volume. EBITDA per ton now similar to JSW Steel standalone+downstream. Sustainable given mix and cost structure.

Diversification strategy conscious choice. Rupee depreciation noted; hedging steps taken. New proceeds used to repay foreign debt. Historical target ~50-55% foreign debt healthy; enables capital raising flexibility.

Middle East conflict cargoes diverted to India. FTA (Japan) imports up. India has 225MT capacity, 169MT production last year; supply robust. Domestic capacity addition ongoing.

Comfort level <2.5x. Currently 1.46x. Guided upper limit 3.0x. Dolvi Phase III (Sep 2027) will add 2MT capacity in FY28.

TMT seasonality similar to past years. Dec 2025 pricing was lower than now; some seasonal correction Q1→Q2→Q3 expected. TMT only ~10% of volume; impact not material.

India resilient; 100MT→164MT in 6 years despite COVID, wars. Structural growth (capex, manufacturing, auto, rural). H2 historically stronger; festive season, capex pickup Nov onwards. Optimistic on sustainability.

Maintained from prior call. BF-3 ramp Q2, JVML full utilization, new capacities ramping (0.44MT downstream projects announced). But import pressure and domestic volume weakness (1% vs 8.3% industry) suggest execution risk.

Margin expansion target NOT achieved. Coking coal $17/ton (vs $12-15 guided), Middle East +$20/ton, long prices -₹7-8k/ton. Visibility lost; management says 'difficult to guide' on pricing.

On track. Total approved capex ₹1.30 Lakh Cr (growth, mining, downstream, cost-saving projects). Long-term 62MT by FY32 capex ~₹2.26 Lakh Cr (Odisha II, Salav, other projects to be approved).

Long steel prices down ₹7-8k/ton since Q1 start; flat prices down ₹1k/ton. Secondary market dumping, import surge (85% flat imports). Spreads compressing; management hedging visibility.

Coking coal $17/ton vs $12-15 guided (+₹230/ton iron ore, +$20/ton Middle East conflict costs). Hedging limited. Zinc/aluminum prices spiking (coated margin variable). Forex exposure still high (64% foreign debt).

Domestic volumes +1% YoY vs industry +8.3%; market share loss evident. Retail destocking, import competition (22% QoQ surge), labor shortages (elections), fuel availability. Monsoon below-normal is key risk.

₹1.30 Lakh Cr approved capex; 62MT by FY32 requires ₹2.26 Lakh Cr total. Dolvi RMHS costs overran (double-conveyor vs single); BF-3 ramp timing critical. Multiple projects in early/mid-stage (Kadapa FY29, Odisha phases, Salav, Maharashtra 25MT stalled).

13 out of 25 iron ore mines operational; Pissurlem (May 2026 win) needs development. Coking coal: Mozambique CY28 (2-year timeline), domestic mines (Parbatpur, Sitanala) timing uncertain. Dugdha washery modernization 2 years to full ramp.