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Informist, Friday, May 15, 2026

 

MUMBAI – JSW Steel Ltd.'s ambitious aim of spending INR 2.26 trillion on capital expenditure for capacity expansion, mining, downstream operations, and joint venture projects from now till 2032-33 (Apr-Mar) has received mixed views by brokerages, with most being bullish. Aggressive and accelerated long-term capacity expansion and capital expenditure estimates were announced by the company's management during the post-earnings call with investors and analysts Thursday.

 

Brokerage Prabhudas Lilladher said in a post-earnings report that timely ramp-up and maintaining balance sheet discipline amid elevated capital expenditure intensity would weigh on JSW Steel's aggressive expansion plans and downstream focus. The steelmaker said apart from the already approved capital expenditure plan of INR 1.26 trillion over four-five years from now, the company would need to additional capital expenditure of INR 1 trillion from now till FY33.

 

This was on account of an ambitious jacking up of the installed standalone capacity target to 62 million tonnes by FY32 from 50 million tonnes per year capacity by FY31. Apart from this, the company aims to have 16 million tonnes of capacity in its joint venture projects by FY32. The current India steel capacity of JSW Steel is around 34.2 million tonnes per year.

 

JSW Steel's accelerated long-term capacity growth ambitions come on the back of a significant debt reduction post-JFE Steel deal and strong confidence in domestic steel demand, according to Prabhudas Lilladher. The company's sharp net debt reduction after the slump sale of subsidiary Bhushan Power and Steel Ltd. to the joint venture with JFE Steel is being seen by analysts as an important driving force behind its ambitious new capacity expansion targets.

 

Even as the structural drivers for the domestic growth story were strong, inflationary risks, disruptions, and export challenges due to the West Asia conflict served as potential headwinds going ahead, brokerage YES Securities said in a report. In its report, brokerage Systematix Institutional Equities listed JSW Steel's execution of large capital expenditure pipeline as a key factor to watch for going ahead. The brokerage also listed steel price sustainability and coking coal costs volatility as other key factors to monitor. In an earlier report, brokerage IDBI Capital had said a resolution to the West Asia war situation will likely lead to moderation in domestic steel prices.

 

Other brokerages did not specify any stumbling blocks to JSW Steel's aggressive capacity expansion and capital expenditure drive. Brokerage ICICI Securities said it is encouraged by JSW Steel's robust expansion pipeline and strategic collaborations with leading global steelmakers in value-added products segment. Excluding JSW Steel's joint venture projects, the company's consolidated debt "is likely to be under control...despite huge capex over the next five years," as per brokerage Nuvama Wealth Management.

 

On Friday, shares of JSW Steel closed 1.4% lower at INR 1,278.80 on the National Stock Exchange.  End

 

Reported by Rajesh Gajra

Edited by Avishek Dutta

 

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