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Informist, Wednesday, Aug. 13, 2025

By Rajesh Gajra

NEW DELHI – Jindal Steel Ltd. will not breach the red line of consolidated net debt-to-earnings before interest, tax, depreciation, and amortisation, or EBITDA, ratio of 1.5 times, the company's management told investors and analysts in a post-June quarter earnings call Wednesday. In the ongoing September quarter till date, the net debt-to-EBITDA ratio is below 1.5 times and in the December quarter, the situation will further improve, a top executive said.

The steel major announced its June quarter earnings Tuesday. Data from the company's investor presentation showed the consolidated net debt-to-EBITDA ratio on a trailing 12-month basis at 1.49 times for the June quarter, up sharply from 1.26 times in the previous quarter and 1.0 time in the year-ago quarter. 

The company saw the high net debt-to-EBITDA ratio in the June quarter as a peak, according to the management. The build-up in inventory in the reporting quarter will get liquidated in the September quarter, a top executive said, adding that this will facilitate the reduction in debt.

In Aug-Sept, Jindal Steel will commission its second blast furnace at the Angul factory in Odisha which will start contributing to volumes and cash flow, according to the management. "I think the stress (on high net debt-to-EBITDA ratio) is behind us now," a top executive. said.

To an analyst's question on the thermal coal mix in the June quarter and how the company is benefiting from captive mines, the management said the supply from Utkal B1 mines is on track in the remainder of this quarter (Jul-Sept). The company should, therefore, be able to meets it coal requirements from its own captive mines "getting into this financial year," a top executive said. In the June quarter, the other Utkal mines continued to perform well for the company and 90-95% of the thermal coal requirement came out from the company's own mines, he said.

STEEL PRICES, DEMAND

The management said the domestic hot-rolled coil steel and thermo-mechanically treated steel prices increased on a sequential basis in the June quarter. In the domestic steel markets, the hot-rolled coil steel prices were partly supported by the 12% safeguard duty on most of the selected steel imports effective mid-April but corrected later due to weak domestic demand, a top executive said. The thermo-mechanically treated steel prices opened the June quarter on a strong note but drifted lower due to the early arrival of monsoon and substantial inventory in the system, he said.  

To a query on the trend in hot-rolled coil imports from China in Jul-Aug, a top executive said "Chinese imports are practically stopped now." A rise in Chinese prices in last one-and-a-half months "has made the price almost unviable for them, he said. "Today, in fact, Chinese imports are at a premium to domestic prices... (and) going forward we are not seeing China as a major threat directly, but indirectly it may have an impact," the top executive said.

Jindal Steel's consolidated sales volume fell sharply by 9% on year and 10% on quarter to 1.90 million tonnes in the June quarter. Flat steel contributed 44% of the sales volume, up from 43% in the year-ago quarter and 42% in the March quarter. Domestic sales volume for the June quarter fell 9% on year and 14% on quarter to 1.78 million tonnes, while export sales fell 8% on year and rose 2.1 times sequentially to 140,000 tonnes.

On the demand outlook for the next few quarters, the management said the company was looking at good demand. In the current quarter so far, the company has already started seeing signs of revival of demand on the construction side, a top executive said.

There are some lead segments like yellow goods and construction equipment which indicate how the demand is going to unfold, he said. "We are seeing very strong demand coming from this sector now in this month (August) which indicates that in the coming quarter the demand will be extremely good," the top executive said.

On the basis of this expectation, the company is retaining its volume guidance for the current financial year 2025-26 (Apr-Mar). In early May, the company had given a crude steel production guidance of 9-10 million tonnes and a sales volume guidance of 8.5-9 million tonnes for FY26.

The company had in July announced the change in its name to Jindal Steel Ltd. from Jindal Steel & Power Ltd. In the June quarter, the company's consolidated revenue from operations fell 9.7% on year to INR 122.94 billion and the consolidated net profit increased 12% on year to INR 14.94 billion.

Shares of Jindal Steel closed at INR 996.35 Wednesday, down 0.2%, on the National Stock Exchange.  End

Edited by Tanima Banerjee

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