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Informist, Friday, May 23, 2025

 

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--JSW Steel: See 8-10% growth in steel demand in India FY26
--CONTEXT: JSW Steel management's comments in post-earnings investor concall
--JSW Steel: Steel prices risen in Mar, Apr; to reflect in June qtr revenue
--JSW Steel: See value added products' share in sales above 60% FY26
--JSW Steel: Exports to continue to face headwinds in FY26
--JSW Steel: Do not see surge in steel imports ahead, but keeping watch on

 

By Rajesh Gajra

 

NEW DELHI – JSW Steel Ltd. expects the rise in domestic primary steel prices in March and April to reflect in its revenue for the June quarter, the management said Friday in a post-earnings conference call with investors and analysts. Steel prices in the domestic market have risen since March after a period of depressed levels due to near-record Chinese steel exports in the financial year 2024-25 (Apr-Mar), according to the management.

 

In the March quarter, lower realisations from steel sales were the main reason why the company's revenue fell 3% sequentially despite sales volume rising 12% on quarter. The government imposed a 12% safeguard duty on steel imports at the start of FY26 and that is supporting the rise in primary steel prices in the domestic market. It has levelled the playing field for domestic manufacturers as imports of steel from China at low prices had hit the industry.

 

The management said it did not see any likelihood of a surge in imports booking going forward. But the company will still have to keep its guard up because steel exports by Chinese companies continue to be at a high level, it said. Countries like Vietnam, Japan, and South Korea, which have a trade agreement with India, also continue to pose risks, it said.

 

"Keep in mind also that the safeguard duties (on steel imports) are applicable and under final review," the management said. If steel imports are found to be surging, the government can "take appropriate action to safeguard domestic industry", it said.

 

Domestic steel demand is currently strong and is likely to grow 8-10% in the current financial year, according to the management. There was some upside potential to global growth as well as "recent developments indicate a move towards tariff de-escalation", it said.

 

But sales to overseas markets by JSW Steel are likely to face headwinds in the current financial year "like we have seen in the past few months", the management said. The share of exports in JSW Steel's India sales volume dropped to 8% in the March quarter from 20% a year ago, according to the company's earnings investor presentation.

 

The company has guided for steel sales of 28.20 million tonnes from its consolidated operations in Indian factories and 1 million tonnes from its operations in the factory in Ohio in the US in FY26, according to the presentation. This guidance factors in a planned 150-day shutdown of the BF-3 unit in Vijayanagar, the management said. In FY25, the company sold 25.67 million tonnes from its Indian operations and 780,000 tonnes from the US operations, as per the presentation.

 

The management said value-added and special products accounted for 62% of the company's total sales volume in FY25, and it expects them to continue to account for more than 60% of total sales volume in FY26. The company will invest in building downstream facilities to enable this, it said. The company is also taking steps to add a line in Vijayanagar for galvanized steel used for automotive manufacturing, the management added.

 

JSW Steel announced its March quarter earnings Friday. The company's consolidated revenue from operations declined 3.1% on year but increased 8.3% on quarter to INR 448.19 billion, while the consolidated net profit rose 16% on year and more than doubled sequentially to INR 15.03 billion. Shares of JSW Steel ended slightly higher at INR 1,008.50 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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