More Stories

Informist, Saturday, Oct. 25, 2025

 

By Rajesh Gajra

 

NEW DELHI - Subdued growth in demand on a year-on-year basis, low net sales realisation from sluggish pricing, and liquidation of built-up high inventory of finished steel from the trailing quarter are likely to have taken a toll on Jindal Steel Ltd.'s bottom line for the September quarter. Costs are not seen to be in favour of the company and many analysts expect the operating profit to fall on year.

 

In a conference call with investors and analysts after the announcement of the June quarter earnings, the steel maker's management had expressed optimism on demand in the September and December quarters. But analysts believe this may not have panned out in the September quarter.

 

Jindal Steel is seen reporting a fall of 27% on year and 58% on quarter in its consolidated net profit at INR 6.3 billion, according to the average of estimates by 10 brokerages. These estimates range from a low of INR 3.7 billion by Motilal Oswal Financial Services and a high of INR 8.6 billion by Nomura Equity Research.

 

The company is expected to post a decline in its consolidated revenue too, with the top line seen declining 1.4% on year and 10% on quarter to INR 110.6 billion. The lowest revenue estimate of INR 107.1 billion is by brokerage Motilal Oswal and the highest estimate of INR 115.3 billion is by brokerage Prabhudas Lilladher.

 

Although the steel safeguard duty on steel imports did have its intended effect of lowering imports, particularly of Chinese steel, it did not lead to an increase in domestic steel prices to steel companies' advantage during the September quarter. Analysts said this was due to subdued domestic steel demand which was contrary to earlier expectations of a significant rise in demand amid robust government capital expenditure and construction activity in the country.

 

A lengthy monsoon led to lower offtake from the projects sector, which comprises construction and infrastructure, according to Anand Rathi Share and Stock Brokers. The effects of all these will be severely felt by Jindal Steel in its sequential top line performance in the September quarter. It will also drag down the revenue for the quarter on a year-on-year basis.

 

There are varying estimates on the volume growth of the company. Jindal Steel's volume for the September quarter is likely to decline 2.6% on quarter, but be stable on year, "with steel realizations lower by 5.9% on a qoq (quarter on quarter) basis (+0.4% yoy) (up 0.4% on year), as price decline in primary rebar was higher relative to HRC (hot rolled coil) in a seasonally weak quarter," Kotak Securities said in a report.

 

The company is likely to report an on-year fall of 8.6% in its volume, according to Nuvama Wealth Management, and a decline of 2.7% according to brokerage Motilal Oswal. On the other hand, brokerage Prabhudas Lilladher expects Jindal Steel's volume to rise around 3% on year.

 

Weak net sales realisation, with average selling price declining 1.8% on year, along with muted volume, will weigh on the company's earnings for the reporting quarter, according to Motilal Oswal. On a quarter-on-quarter basis, Jindal Steel's net sales realisation will likely be lower due to lower prices of long steel products, to which the company has the maximum exposure, according to Prabhudas Lilladher.

 

Jindal Steel's earnings before interest, tax, depreciation, and amortisation is expected to be INR 18.9 billion for the September quarter. Most analysts expect near double-digit decline in EBITDA and EBITDA per tonne on a year-on-year basis. EBITA is seen declining 9.1% on year by Emkay Global Financial Services, 8.8% by Nuvama, and 7.9% by Kotak Securities.

 

The EBITDA decline will be due to expected lower realisations and higher costs, according to Kotak Securities. "Lower operating leverage will further erode the margin," brokerage Motilal Oswal said.

 

The company will detail its September quarter earnings on Tuesday. Investors will watch for the management's guidance on pricing and domestic demand and the commentary on capex timelines, according to brokerage Motilal Oswal.

 

In the trailing quarter, the company had reported an on-year rise of 12% in its consolidated net profit at INR 14.9 billion,  whereas its consolidated revenue had fallen 9.7% on year to INR 122.9 billion.

 

On Friday, shares of Jindal Steel closed at INR 1,008.20 on the National Stock Exchange. The stock is up 1% since the announcement of the company's June quarter earnings.

 

Of the 15 brokerage reports on the company available with Informist, 12 have a 'buy' call at an average target price of INR 1,075, two have a 'hold' recommendation, and one has a 'sell' call at a target price of INR 900.

 

Following are the September quarter earnings estimates for Jindal Steel from 10 broking firms in descending order of estimate of net profit:

 

Broking firm	Net sales	Net profit	EBITDA
	(In INR million)
Nomura Equity Research	108,637	8,597	16,755
IDBI Capital Market Services Ltd	109,814	8,192	20,952
Kotak Securities Ltd	112,594	7,229	19,568
ICICI Securities Ltd	114,195	6,875	19,122
Emkay Global Financial Services Ltd	110,574	6,419	19,313
Prabhudas Lilladher Pvt Ltd	115,300	6,400	20,100
JM Financial Institutional Securities Pvt Ltd	108,000	6,000	19,000
Nuvama Wealth Management Ltd	109,927	5,548	19,371
Anand Rathi Share and Stock Brokers Ltd	109,309	4,135	---
Motilal Oswal Financial Services Ltd	107,114	3,663	15,840
Average	110,546	6,306	18,891

 

End

 

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.