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Informist, Saturday, Jul. 25, 2026

 

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--Jindal Steel: Great opportunity for steel industry after West Asia war 
--CONTEXT: Jindal Steel mgmt's comments in post-earnings call with analysts 
--Jindal Steel:See thermo-mechanically treated rebar demand slowing in rains 
--Jindal Steel: Focused on reaching 100?pacity utilisation, reducing cost 
--Jindal Steel: Have less than 10-11 days of inventory available 
--Jindal Steel: Invested INR 20 bln in Apr-Jun as capex 
--Jindal Steel: Main focus remains on capacity utilisation 
--Jindal Steel: Focused on making value-added products 
--Jindal Steel: Not looking to borrow for commodities 
--Jindal Steel: Aim for capex of INR 70 bln to INR 80 bln per year 
--Jindal Steel: To make 27,000 tn steel per day after monsoon 
--Jindal Steel: Natural calamities bring opportunities for steel industry 
--Jindal Steel: Aim for 10.5-11.0 mln tonnes of sales in FY27 
--Jindal Steel: Saw INR 1,000-INR 2,000 per tn realisation fall across pdts 
--Jindal Steel: Resignations at top management level worrying 

 

By Astha Oriel and Kabir Sharma

 

NEW DELHI/MUMBAI – Led by a new management team, Jindal Steel Ltd. intends to focus on capacity expansion and cost reduction in the financial year 2026-27 (Apr-Mar), the company told analysts Saturday in a post-earnings conference call. The company reported its earnings Friday after market hours.

 

"Our first and foremost focus is that we should reach to 100?pacity utilisation," a senior management official said. "This is the first point. The second point is we want to reduce our cost. Because once you increase capacities, with the economy of scales, we reduce cost also."

 

The company aims to reach crude steel production capacity of 15.6 million tonnes per annum by the end of FY27. It is also aiming for a sales volume of 10.5 million tonnes to 11.0 million tonnes, the management said. For this, it is targeting daily crude steel production of 27,000 tonnes, the management said.

 

Giving a breakup of how this will be achieved, the management said it aims to produce 24,000 tonnes of crude steel every day from its two blast furnaces at the Angul plant in Odisha. The company plans to ramp up the Angul plant's blast furnace 2 to about 12,000 tonnes in September and 13,000 tonnes by December. Blast furnace 1 is already producing 10,000-11,000 tonnes of crude steel a day, the management said. The company plans to ultimately reach 30,000 tonnes of crude steel production per day.

 

Jindal Steel is also focusing on value-added products. "We are not in the race of putting more and more hot-step mills or more and more commodity mills. We are here to utilise our mills to the best of their technical expertise, and produce more and more value-engineered products than commodity products," the management said. 

 

The company will be working on an earn-and-invest basis, according to the management. "We are not going to burden our balance sheet with borrowings. We do not want to take loans. We don't want to borrow the funds to expand in the commodity area. We will do all those expansions which are required in the value-added products, value-added steel, value-engineered products."

 

The company intends to invest INR 70 billion–INR 80 billion in capital expenditure per annum. "We want to grow not at the rate of tons but at the spending rate of about 7,000 to 8,000 or maybe 10,000 crores (INR 100 billion) per year," the official said. Of the INR 85 billion capital expenditure target for FY27, the company invested INR 20 billion in the June quarter itself.

 

During the quarter, the company witnessed a fall of INR 1,000–INR 2,000 per tonne in realisations across products, according to the management. Its total expenses rose nearly 39% on year to INR 142.96 billion, leading to a sharp fall in net profit. The cost of materials consumed rose nearly 44% on year to INR 44.72 billion.

 

In Apr-Jun, the cost of coking coal, a critical raw material in steel manufacture, surged to $23 per tonne from $12-$13 per tonne amid the West Asia crisis, according to the management. "And there was an operating leverage on account of the plant maintenance shutdown, which was lesser production on a quarter-on-quarter basis," it said.

 

The company expects a slowdown in demand for thermo-mechanically treated rebar, or reinforcing bar, during the monsoon. The demand is likely to recover once the monsoon recedes.

 

The management noted that natural calamities bring opportunities for the steel industry. "There is always a light (at) the end of the tunnel. So, we are seeing that in times to come, or very soon, there will be a solution to both problems, both the wars which are being fought in Europe and in the Middle East. The moment these two wars are stopped, then we are looking at a great opportunity for the steel industry to come back and supply steel worldwide," an official said. Going ahead, the company has less than 10-11 days of inventory available, as per the management.

 

The management admitted the spate of resignations at senior levels of the company over the past few months was worrying. "We are confident that we are a stable organisation, since at least 1,800-2,000 people are in the upper-middle-level team," the management said. "And these people are a very strong force, strong team." 

 

Jindal Steel has appointed Vidya Rattan Sharma as managing director for two years and Sandeep Modi as chief financial officer. The company also appointed Rajiv Kumar as chief operating officer. On Jul. 1, Gautam Malhotra resigned as chief executive officer. He quit barely a year after joining the company.

 

Jindal Steel reported a year-on-year decline of 43% in consolidated net profit for the June quarter to INR 8.45 billion on revenues of INR 154.82 billion. The company reported its June quarter earnings after market hours Friday. Its shares had ended at INR 1,035.80 on the National Stock Exchange, down 0.6% from Thursday.  End

 

Edited by Rajeev Pai

 

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