JSW Steel Limited (JSWSTEEL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good evening and welcome to JSWT Ltd. Q4 F526 Earnings Conference Call. As a reminder, all participant lines will remain in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. With this, I now hand the conference over to Mr. Ashwin Bajaj, Group Head of Investor Relations. Thank you, and over to you.

Thank you, operator.

Very good evening, ladies and gentlemen. Welcome to JSA's earnings call for Q4 in financial year 2026. We have with us today the management team, represented by Mr. Jayant Acharya, Joint MD and CEO, Mr. G. Sartor, Chief Operating Officer, Mr. Arunma Eshwari, Director of Commercial and Marketing, and Mr. Sartor, the CFO.

We'll start with opening remarks by Mr. Acharya, and then open the floor to Q&A. So with that, over to you, Mr. Acharya. Thank you, Ashwin. Good evening, everyone. So FY26 was a transformational year for JSW Steel, marked by strategic joint ventures with global steel majors, progress on steelmaking and downstream capacity expansions, enhanced raw material security, and significant balance sheet deleveraging. In December 2025, we took a very important strategic step of advancing our longstanding partnership with JFU Steel of Japan. We announced a 50-50 joint venture with them for our BPSL steel business. The transaction has progressed as scheduled with the JV entity being formed by end of March, and JFE has brought in the first tranche of their equity investment into the joint venture. This transaction entails a deleveraging of approximately 37,000 crores. JSW Steel, out of which about 30,000 crores has been completed at March end. JSW Steel's balance sheet has transformed with operational improvements. Our leverage has fallen to 1.81 as on 31st of March, and net debt stands at 54,000 crores. Our credit rating outlook has seen an uplift, and we expect to see continued progress on this front. As you are aware, we have also been working on a joint venture with POSCO, South Korea. Last month, we have signed a joint venture agreement with POSCO at this India-South Korea summit in New Delhi to set up a greenfield integrated steel plant of 6 million tons in Orisa. This transformation has set the foundation for our next phase of growth. India's continued strong growth in steel demand and our strong balance sheet has enabled us to accelerate the growth plans. We have been targeting a capacity of 50 million tons as we have been communicating in India by F531. We are now announcing a target of 62 million tons by F532. Which can be achieved through our existing sites. In addition to this, the joint ventures of GFE and POSCO will have a cumulative capacity of 16 million tons by FY32, taking the total capacity in India along with joint ventures to 78 million tons. Including our Ohio capacity of 1.5 million, the capacity would be close to 80 million tons. for JSW Steel and the joint venture entities put together. Interestingly, if we just look at the ranking of steel productions, U.S. at number three and Japan at number four, as a country, produce about 80 million tons. So, this capacity would bring us... to be one of the largest steel producing companies worldwide. During the year, we have announced an acquisition of BMM SPAT in Karnataka, a 0.9 million ton producer of long products, which should complement our product basket of long products. BMM is located at close proximity of about 50 kilometers from our Vijayanagara Steel Plant. It has land available with expansion potential of 0.9 million ton to be expanded to 1.8 million ton at low specific investment cost. The expansions would focus on engineering specialized steel, and this acquisition is expected to be completed by end of this financial year. Our expansions in 1 million ton in Kadappa and the first phase of 5 million ton at GSW Utkal, which we announced last year are progressing on track. We are announcing a further 5 million ton expansion at Vijayanagar, which will take the Vijayanagar steel plant capacity to 25 million tons, making it the world's largest single-location steel plant. Our growth strategy also focuses on value-added products, and during the year, we have announced several downstream projects across our various sites in order to maintain our share of BASP over 50%. We've also taken big strides to enhance our raw material security. We have completed the acquisition of MDR high-grade coking coal mines in Mozambique. We have increased our effective interest in Ilawara coking coal mines from 20% to 30%. On the Aeronaut side, we have operationalized one new mine in Goa, and we have won one additional mine in Goa in the last few days. We had previously stated our target of achieving a 50% captive iron ore integration and 25% captive coking coal by F531 at a 50 million steel capacity. With the MDR acquisition, we now expect to be 50% captive for both coking coal and iron ore. By FY31, we would also target going forward to enhance our captive to meet the 50% share at 62 million tons capacity as well. So that's the last year has truly been transformation. In slide eight of our presentation, you will see that over the next decade, India will be the key steel market globally. China's steel production and consumption as a share of global demand peaked out around 2020, and is expected to see a gradual decline. Other markets will witness muted growth. India is going through a nation-building phase, with steel being a key building block for growth. This creates a long runway for steel demand to outpace the real GDP growth. India, as the second steel producer and consumer, will continue to increase its share of global steel consumption from about 9% currently to 16% in a decade. We believe production growth is likely to lag consumption growth. JSW's strength and capabilities, including human capital, digitalization, and AI, gives us the confidence to grow steadily to meet this Indian opportunity. At the same time, we will stay prudent and focused on creating shareholder value as we have done historically in the past. On the macroeconomic front, the global economic growth outlook remains resilient, with IMF forecasting global growth in 2026 at 3.1%, and the outlook for 2027 at 3.2%. This is despite the world economy facing elevated uncertainty driven by geopolitical events, particularly in the Middle East, which is causing supply disruptions, inflationary risks, increasing the pressure on interest rates. IMF, however, has flagged that prolonged continuation of this conflict could result in an impact on the GDP. Even as global uncertainties persist, India continues to grow. To show strong growth momentum. The forecast by RBI for FI27 is 6.9 percent. Reflects the strength of domestic fundamentals, with Indian growth demand remaining robust. India has shown resilience in sustaining growth and geopolitical shocks. Such shocks are increasingly becoming the new normal. Economic activity in India has picked up in the second half of the year, supported by GST-led reforms. Healthy rural indicators, strong credit growth, improving capacity utilization and traction across key sectors continue to support the outlook. At the same time, risks such as energy price, volatility, and monsoon-related uncertainties needs to be monitored. India's steel consumption also grew at a healthy rate of 7.9% in FY26. Due to a large flow of imports in the past two years, we have been a net importer. With the imposition of safeguard duty last year, steel imports have declined and exports have risen, making India a net exporter after two years. Looking ahead, domestic steel demand is expected to grow at a healthy rate of 7% to 9% in FY27, incrementally adding 12 to 14 million tons of demand. In China, steel production was down 4.6% in quarter one, outpacing the 4.2% decline in consumption. With production easing and export licensing norms coming into play from January beginning, steel exports, including semis, fell by 8.1% via wire. Looking ahead, a better demand-supply balance is expected, as China's steel demand is projected to… We will be able to contract at a slower pace than what we have seen in the previous year. JSW Steel's growth continues to be firmly India-centric, reflecting our long-term conviction in India's growth trajectory. Steel is the building block for growth across manufacturing, infrastructure, engineering, energy, and mobility. A strong domestic ecosystem directly contributes to self-reliance, while also creating an opportunity To build further resilience and self-reliance in the country. Our growth strategy continues to focus on disciplined capital allocation, efficient execution, technology, and digitalization to create sustainable value for all stakeholders. On sustainability, we were included in the S&P Global Sustainability Yearbook, earned the top 1% emblem globally across industries, and were ranked number one in the global steel sector. We have commissioned one gigawatt of renewable capacity with a total 2.5 gigawatt approved by our board, along with 320 megawatt of battery storage. We also deployed India's first electric locomotive for captive logistics at Vijayanagar. On the update of our project, just to give you a brief overview of Vijayanagara, the BF3 expansion from 3 to 4.5 million is currently under testing and commissioning. The ramp-up is expected to add incremental volumes from Q2 onwards. At Dolby, the phase 3 expansion from 10 to 15 million tons is moving ahead as planned, with civil work equipment direction underway and targeted for completion by September 27. At JSW Utkal in Orissa, the two pellet plants will be commissioned by F-528. The first phase of 5 million steel capacity will be commissioned by F-530. The 30 million ton slurry pipeline in Orissa is progressing well and is expected to be commissioned by F-527. The 1 million ton structural mill at Kadappa is progressing with equipment ordering underway and commissioned targeting by F-529. We are adding about 3 million tons of value-added capacities while we grow our steel capacities across galvanized electrical steel, tin plate, coal rolling, structural products, etc. And these projects are progressing well and will be commissioned between FI 28 and 29. In addition, let me give you a little bit of an update on the raw material side. On iron ore, we have 25 iron ore mines, out of which 13 are currently operational. We are working on operationalizing the remaining mines, as well as increasing the EC capacity of some of the operating ones. In Goa, we expect to operationalize two more mines in quarter one of FY28, by quarter one of FY28. As we increase our captive iron ore production, we are geographically optimizing our sourcing, thus reducing our logistics cost and lead times. The 2 million tonne iron ore mine at Netrabandha, which is now with the joint venture, is now part of the – is being commissioned in the quarter four, increasing the iron ore availability for the joint venture. On the cooking coal front, as we mentioned earlier, Mozambique has the potential to yield 250 million tons of usable, high-quality cooking coal. The mine will be developed in phases, and the first phase is targeted to be completed by mid-calendar year 2008, producing around 5 million tons of usable cooking coal. In addition to the 30% stake in Ilawara, we have three mines and coal linkages in India, which together will provide around 5.5 million tons of coking coal. Along with MDR, we will have approximately 10 million tons of captive coking coal, meeting around 50% of our total coking coal requirement by FI31. Coming to our operating performance, Q4 was characterized by strong volume growth and operational performance supported by efficient asset utilization and increased plant reliability due to digitalization efforts across our sites. This was reflected in the higher capacity utilization for the Indian operations, which stood at 96%, excluding the BFC shutdown. The downstream capacity utilization also increased in quarter 4 to 95% that provided us higher VASP volumes. Steel sales proved at around 8 million tons per quarter 4 and around 30 million tons per FI-26, driven by improved domestic sales, supported by growing steel demand in India. Our geographic and sectoral mix has improved. Automotive packaging, alloy engineering sectors have increased. Also, branded sales constituted about 50% of our total retail sales, enhancing the overall value of the volumes. During the quarter, we reduced inventory by 700,000 tons and approximately 100,000 tons over the full year. We achieved 99% of our production guidance and 102% of our sales volume guidance for the year. Coming to the financial results, our consolidated revenues in quarter four crossed 51,100 crores, crossing 50,000 crores for the first time. Adjusted EBITDA stood at 9,713 crores with an EBITDA margin of 19%, while PAT stood at 19,243 crores. It is important to note that there was an exceptional gain of 17,888 crores in quarter 4. This includes a gain of 18,051 crores on slump sale of BPSL, steel undertaking, and 163 crores, exceptional charge on implementation of new labor code. The normalized PAT, excluding exceptionals for the quarter, was 3475 crores. In FY26, the adjusted EBITDA stood at 32,048 crores, and the normalized PAT, excluding exceptionals, was 8,700 crores. We transited from quarter three with one of the lowest steel prices, which has improved gradually post the imposition of safeguard duty and strengthened through March. Some part of this price recovery will be realized in quarter one FY27. On the cost side, we were impacted by higher cooking coal prices, which increased by about $16 per ton. Iron ore costs were flattish during the quarter, with one-third of captive iron ore usage in the quarter FY26. At our overseas operation, Q4 performance was better at the Platon Pipe Mill in Texas. However, the Ohio operations production was impacted as activities ramped up in January 26, following the caster upgrades and extreme cold weather. Overall, for FI26, the performance of U.S. operations improved significantly, reporting an EBITDA positive of $36 million compared to an EBITDA loss of $35 million in the previous year. The Italian operations also performed well in FI26, reporting an EBITDA of 16.4 million euros versus close to 15 million euros in the previous year. The BPSL transaction was driven. As driven a structural deleveraging and transformed our balance sheet, our net debt has declined and stood at 54,000 crores by the year end. Our revenue acceptance has stood at $2.1 billion. Leverage and gearing have dropped substantially to 1.81 and 0.51 respectively. The second tranche of equity investment in JFE is expected by end June, which will drive further deleveraging of 7,900 crores approximately. We have also revised our stated maximum cap for gearing from 1.75 to 1.25 and leverage from 3.75 to 3. However, our comfort level will be to keep the leverage below 2.5. During the quarter, we incurred capex of 4,612 crores and 15,600 crores for F526. The capex for our approved growth plan is 126,000 crores, which will be spent over the next four to five years. We expect to spend about 22,000 to 24,000 crores in FY27. The JSW online platform, in which we have about 61% equity stake on a fully diluted basis, continued to see strong momentum in the year. In quarter four, it turned profitable for the first time. The steel volumes grew by 50% YOY, and the GMB reached 6,200 crores, a 57% YOY increase. Over 2,000 crores of this GMB was driven by JSW1's credit offerings. Looking ahead. We expect our cooking coal cost to be higher by $12 to $15 in quarter one. And for FY27, we expect consolidated steel production of 29.75 million tons and a sale of 28.6 million tons. This includes volumes from BMMS Park, which is being acquired by us, but excludes volume from our JFE joint venture. We expect the domestic steel demand to grow in the range of 7% to 9% in FY27, and JSW Steel is well-positioned to support this growth. We'll be happy to take questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question and to restrict to two questions at a time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Bebo Zutshi from JPMorgan. Please go ahead.

Yes, hi. Thanks for the opportunity, and congratulations on the strong results. The first question was basically on the raw material security, given, you know, the target of 78 billion tons. Starting with iron ore, maybe, while you said the captive mix would be 50%, we have seen, you know, some of the global, I don't know, majors ramping up iron ore exports to JWT. So how confident are we in exam take-ups in a captive mix from one-third currency to 50% and how could it be the mix for imports versus domestic sourcing? So just to provide some guidance on that, please.

Hi, and after that, I'm Arun Aishwari. Regarding the security of iron ore up to 50% from the captive resources, today also we have a 50% EC capacity available for the iron ore within India for our own commercial. Depending upon the logistics ratios, depending upon the proximity, depending upon the other sources available at that particular point of time, we defined to use how much we should be taking out from the captive. So that's how we decided to take only up to one-third of the consumption last year from our captive sources, even though the issues were available up to 50% of our own consumption. So this is how we try to maximize our logistical advantages at different geographies because we are located almost on the geography of India. Going forward also, we continue to participate in the assets of iron ore within India. Recently, we have acquired some more in Goa. We continue to look for something more in South. We are participating in Andhra Pradesh, wherein we have secured our subconcessions. Those are exploration licenses, wherein we are doing more exploration. So today, we have 13 operational mines and about 12 years of exploration. So, we will continue to, you know, upgrade, keep on upgrading our captive sources available, and we are confident that at 62 million tons of JSW's volume, we will have a targeted volume of captive sourcing.

Our total number of mines, as we mentioned, was 25 with total combined resources of about 1.7 billion tons without the mines which are under exploration right now. So those will add to the resources.

Okay, okay. Got it. That's helpful. And the second question is on the Middle East conflict. So, you know, we have been seeing that there is a reduction in commercial LPG supplies and some shortages in natural gas as well. So, do you see any risk to the volume guidance if the conflict continues or, you know, those issues are largely resolved in the guidance that you've provided?

Well, yes, LPG and the gas supplies, LNG, has been a recent cause of concern because of the Middle East disruption, but our exposure to the gas-linked production is very limited in the overall production. However, it does have an impact on the cost of production. However, we have ensured, and we continue to ensure that there won't be any production disruption by virtue of non-everybody of gas, unless it becomes too severe in the coming months. Otherwise, our portion to the gasoline to a steel production is very, very less.

Thank you.

We'll take our next question from the line of Amit Dixit from Goldman Sachs.

Yeah, hi. Good evening, sir, and congratulations for a good performance. A couple of questions from my side. The first one is on realization. Now, given that realizations have gone up and spot realizations have gone up much higher in last quarter, what kind of realization increase do we expect going for? I mean, in Q1, if you consider that, you know, the prices are rebate at the current level, I mean, considering the contracts that you might have and other things.

So, yeah, Amit, you're right. Since the increases have happened between January to March gradually, part of the increase is reflected in our quarter four numbers, and the balance increase will be reflected in quarter one. Quarter 4, our NSR has moved up by about 3,800 rupees per tonne, and we would see the balance of the price increase play out in quarter 1.

Is it possible to quantify the balance?

So, difficult to give a number because it will depend on, again, the product mix, you know, and it will also... Take into account a seasonal number, but I think we expect that after covering the cost, because the cost also will go up. My senses or our senses are the cost will go up in the range of 3,000 rupees or so per ton, but the margins will still be positive after covering the cost. So the price will cover the cost and add to the margin.

Great, understood. The second one is essentially on the expansion that we have announced. Now, most of our expansions are flat focused. And, you know, in the country, traditionally, we have seen longs demand outpacing flats. So any thoughts around longs expansion as well? I know you've mentioned one of the acquisitions that you have done. But apart from that, are we planning to get active in longs as far as downstream expansion is concerned?

So, in the last announcements, if you recall, we have announced that the Karappa section mill, which is a structural mill, which would go for beams, and the expansion at our Riger facility, which would have beam and rails. So, those will be in long products. In the beam facility, which we have, you know, just approved at the board for acquisition, which is a 1 million ton long facility, would be expanded to about 1.8 million ton. And that would also be in special engineering steel products. So yeah, these would add to the long product capacities which we currently have. We believe that, you know, India with the infrastructure growth would require long products and these would help in meeting those demands.

Okay, fair enough. All right. Thank you.

Thank you. Next question is from the line of Amit Murarka from Access Capital. Please go ahead.

Yeah, good evening, and thanks for the opportunity. So I wanted to understand the thought on growth going ahead. Like earlier, in the past, we've seen that usually you have taken one project at a time. So given that now you're indicating taking on multiple projects, So is it now the new normal, like, or should we, like, look at the business now as three babin sheets, like one standalone, one JFE-JV, and one POSCO-JV for all your growth programs going ahead?

From JSW Steel's perspective, if you see the slide which we have already given to you, that by FI 30, JSW Steel alone will be at 49. And on top of that, we would have the joint venture of JSWGFE, and including Ohio, will be close to 55 million tons by FY30. The expansion of JSW Steel alone. Up to FI32 would be to 62 million. So what you would track for JSW Steel will be the 62 million tons. On top of this, we have 10 million tons as we expect from the joint venture with JFE in the existing site and the 6 million ton new facility at POSCO. Those would be tracked again separately. Yeah, yeah, and Mr. Rathur is just adding that status.

Yeah, so like the Dole V will get over in another one year or so, then we will start, this year we'll start Paradeep and Vigenever. So we'll have two sites instead of one site, each 5 million. So, yeah, that's the target we are taking.

No, my question is more longer term. So what I was trying to understand is, like, usually in the past, you've taken one project at a time and then moved ahead. So is this now a new normal that you'll be taking up multiple projects through the JV structure that is in place now?

Yeah, so as we had given it, you know, given you an indication earlier that the idea of the JV was to strategically grow faster in the country. While it helped us to deliver it as well. So we'll have a double engine of growth, one which JW Steel will grow on, and the other which the joint venture will grow on. We have also, you know, we have given you an indication that India is the fastest growing market, and this is the right time to be able to take this opportunity and grow faster. That's the idea. And we would therefore, so your answer is yes, we would be expanding faster along Along with the joint ventures.

Right. And given that the pace of growth is going to be so high, is there a plan to also kind of export a larger part of these volumes than what we are doing currently then?

Can you just repeat that one? Sorry.

Given that the pace of growth at a JSW, including JV level, is going to be quite accelerated with multiple capacities being done. So is there also a plan to essentially raise exports to a much higher percentage than what it is today in the current portfolio?

We don't, you know, we don't see the need as of now. The way, you know, it is structured, I think you will see probably more of domestic alignment. It's possible that when the capacities incrementally maybe come up in the first one year or two years, you have a slightly higher export, but then come down. Having said that, but I would like to say that our Paradir facility, which is on the port, Would be the natural place to export from. So the exports from Paradeep will naturally be higher than other sites. But, you know, given the domestic growth, as we have reiterated earlier, our feeling is that this capacity will be required to meet the domestic growth which we are seeing today. If you're looking at a number of 230 million tons by the end of this decade and going beyond thereafter, unless capacities are put in place, I think India will not be able to meet this demand. I also mentioned a line, I think we believe that capacities are going to follow demand. And there will be a lag in the medium term up to 2030. Any capacity which is set up today takes four to five years minimum. So when you start a project, keep that in mind. But we are quite confident that, you know, with our faster pace of execution and low specific investment cost. We are well-placed to, you know, grow in India, and we are quite optimistic that this is in line with the growth and not in excess of the growth.

And last data question.

I request you to join by the Q, please, as we are participants waiting for their turn. Thank you. Next question is from the line of Sumandal Nivatya from Kotex Securities. Please go ahead.

Yeah, good evening, and thanks for the opportunity. My first question is with respect to a JV with POSCO. I just want to understand better what is the rationale and what value does the new JV partner brings? Given that, we already have a very strong balance sheet after the GFE deal, and we also have a lot of access to expertise in value-added products, etc., given association with GFE. So, just some color on this. Thanks.

So there are two reasons. One is that both JFE and POSCO are leading global steel companies, and both have their strengths on technology. There are certain strengths which JFE, we have been able to get along with JFE to India, CRGO being one of them, and we have collaborated with them on many areas of improvements, and we continue to do so. POSCO also has their own areas of technology, and especially in the high-strength steels, giga steels, which would go for lightweighting, replacement of aluminum, hydrogen technology to reduce emissions. I think those are areas of cooperation between POSCO and us. In addition to that, POSCO has a We have a 2 million ton coal rolling facility in Maharashtra, and they would like to integrate backwards with a steel plant, and one of their criteria for looking for a steel plant in India has been to have a backward integration of the steel from their own facility. So these are the two reasons.

And that is largely because they wanted to have a localization of sourcing, and that is one of the primary reasons even POSCO wanted to come to India.

Yeah. So going forward, they want to buy, rather than sending it from Korea, they want to buy more steel from the local facility in India.

Understood. And just to ask on this topic a bit more, one is, I mean, how does an existing JV partners view association with new global players? Is there a potential conflict in future? And I mean, few years down the line, we'd have three large plants supplying flat steel from Odisha. So, will we have a different sales strategy, different targeted downstream products across the plants, or will they just compete like independent plants?

We do not foresee any conflict between the JAB partners, per se. They will have their own strategies, for sure, because they'll be different legal entities. But we see, as we mentioned, the growth of India is strong and, therefore, will enable all the entities to grow. And POSCO Maharashtra, as I mentioned, is a 2 million ton. Basically, a captive demand for the POSCO facility, which will come up. So keep that in mind as well. So that will be supplying basically one-third of their total new capacity to the downstream facility.

Got it. My second question is... Okay, can I go for a second question?

Yeah, please go ahead.

Yeah, so just, I mean, on a broader level, just want to understand, given the overall macro issues in the country and the pressure on inflation, do we see any risk of some withdrawal of protection given our domestic prices are enjoying 20% kind of higher prices due to the protection? Just some thoughts here, sir.

I think we, if you really look at protection, I would say India is probably one of the more balanced countries with respect to protection as you see it worldwide today. We are seeing protections between 25 to 50 percent in various parts of the world. Every country is trying to safeguard their shores from any kind of… Trade flows, which can be adverse for that country, and that is becoming very critical to the supply chain resilience of that country. In India, with an 11.5% safeguard duty, I think we are far lower than what the rest of the world is. That's number one. Number two, your comparison is with the lows of December. I would not do that. Three years back, in April 23, we had the same It's the same price as we had in April 26. The cost environment was similar if you were to look at coal and iron ore. But on top of that, the depreciation of the rupee has been severe. So please look at the fact that your cost on account of the overall ecosystem has gone up. You have just come back to where you were three years back. I would say this more of a price correction and to make it a viable price. From an international price perspective also, I think we are now well-balanced. We do not think that we are very much off the international prices as we see today. If you look at, by and large, the Western economies, if you were to look at Europe and... U.S. Europe is already in the range of 830-odd dollars of outdoor coil, and I think U.S. is close to $1,100 per metric ton of outdoor coils, and Japan also, and Korea also, internal prices are higher. So we are, price point of view also, more balanced in India.

Thank you. Very useful. Thanks, and all of us, too.

Next question is from the line of Pinakin from HSBC. Please go ahead.

Yeah, thank you very much, sir. My first question is, if you look at the CAPEX guidance of 1,26,000 euros over the next four to five years, that clearly does not capture the entire 30 million ton JSW Street expansion and the 10.5 million ton at the JV. So if you take a step back, can you give us a broad range of the capex over the next five, six years to go from the current capacity base to 78.5 million ton capacity base and includes downstream mining everything?

So currently, as we have given you the capacity expansion plans, our capex plans are at 126,000 crores as of now. Incrementally, to be at $62 million plus invest for equity for the joint venture and our mining, other investments, downstream facilities, our sense is that we would require another $100,000 crores between now to F533 because F532, if you try and try to. Plan a capacity, the payment would spill over at least to the next year. So you have about six to seven years, seven years in which you would spread this CapEx.

So, sir, just to understand clearly, this 126 plus another 1 lakh crore, so 2 lakh 26,000 crores over the next, let's assume, 6 to 7 years, right? FI 27 is at 22,000 crores. So, the way we should look at it that in the coming years, the annual run rate of the CAPEX will go from the 20 to the 30, 35,000 crores a year in the next couple of years as the project, the multiple projects pick up pace.

Yes, this is including the joint venture projects, including the mining which we would do in Mozambique, including our own 62 million tons. It's a combination of all of them. Yes.

Got it. And for my second question is, if I look at the guidance, right, if I strip away BPSM from this year's base, it implies roughly 9-9.5% of production growth in FY27. Given the timelines of the project commissionings that we have in terms of Dolby, Vijay and Agar, is it fair to say that this is the broad 8-10% CAGR that we can look at for the next 3-4 years?

I think if you see the guidance which we have given, if I recall, we have given a guidance of 29.75 million tons, which on a like-to-like basis is a 13% growth in production, and a guidance of sales at 28.6 million tons is a 10% growth. Now, going forward, the capacities, as you know, we are getting in capacities of Vijayanagara and Dolby put together, which would add about 7 million tons of capacity between now to September 27th. The Utkal facilities, which have been taken up, and the Vijayanagara facilities for expansion of another 10 million tons, etc., which has been taken up, would be there by F530. And those will provide, each of them will provide incremental habitats for the next phase of growth.

Got it, got it. This is very helpful. Thank you very much, sir.

Thank you. Next question is from the line of Pallav Agarwal from Antic Store Broking. Please go ahead. Hello, your line is unmuted. Please go ahead with your question.

Yeah, good evening, sir. Am I ordering now? Yeah, so first question was on the end of this part. So, you know, I think, can you share what was the actual production and, you know, EBITDA number in SI25 for this company?

I think we'll request our investor team, you can reach out to them and take the details. I don't have it off the cuff right now. It's a facility of 0.9 million tons, just to give you an overview. So 0.9 million tons, so you can... Roughly producing in the range of, I would say, they would produce in the range of 0.8 million ton in this financial year.

Sure, sir. And also, you know, if I look at the network, you know, I think probably it's about 2,700 crores as per, you know, the press release on this property. So, and we've acquired about 6,500 crores. So that's close to almost three times, you know, on a price drop basis. So, so is this factoring in the future expansion that's been happening with it?

No, so the current price at which this is, this is acquired. It represents multiple approaches, discounted cash flow as well as the take-home cost. It's roughly a million-time plant. Also, the fact that it has a blast furnace, which is very new, which was commissioned only last year. And if you take a normative EBITDA pattern of plant of this size, You will realize that the effective EV EBITDA is significantly attractive, plus the fact that this has potential to expand capacity, almost double from here in a fairly short period of time. All of these factors, but the valuation, we believe, is fairly attractive, plus this energy guitar of the general location, which is very close to it.

On an expanded basis, you're right that this gives us the additional headroom because we feel the next 1 million or 0.9 million ton can be expanded between 1,600 to 1,800 crores, making the overall investment very attractive.

Thank you. I request you to join back the queue, please. Thank you. Next question is from the line of Parthiv Jones, sir, from Anandrathi. Please go ahead.

Thank you for the opportunity, and congratulations on completing the JV and further spending the relationship with the partner. I have two questions. The first question is pertaining to the scheme prices, considering, you know, just a couple of days back or very recently, you know, a couple of companies from Vietnam, China have taken substantial price hike. And also, you know, your price in Europe and USA are at a reasonably high level. I just want to check if you can just give a number of what can we expect as far as your price increase in quarter one and H1 going forward.

So, in the month of April, we have increased prices, and we have increased some price for flat products in the month of May as well. I think we increased $2,000 in April and $1,000 in May for flat. But our belief is that for now, the price will be range-bound. We will watch the geopolitical

And so just continue to that question, any contracts from auto which would be done at a much higher prices? Because I believe it's at a rolling basis, right?

Yeah, it would. So auto gets recalibrated quarterly, so the price increase for automotive will come in this quarter. The quarterly prices will get recalibrated. Those will be also in this quarter. You're right. Okay.

And any idea on the hike which we can expect

from the price from the auto sector? I will not be able to give you numbers here, but as we close the things, it will come out in terms of… No problem.

Nice. Yeah, my second question is pertaining to the, your analyzed KPEX run rate of about 30-35,000 odd crores going forward, right? I believe though you are very comfortable for say 27, considering your production entries are at about 10-13% higher on a like-to-like basis and also the prices are good. However, going forward, actually, 35,000 crores of KPS on analyzed business, would you start, you know, opting for more debt? Because for in the near term, I think your cash flows might not match, if I'm not mistaken.

This is Swayam here. If you factor in the capacity, incremental capacity, which are going to be available fully from now, It will make one and a half years, and that includes JVML, which is not at full capacity yet in FY26, can do one million more. BF3, which is going to start production once the capacity of gradation is completed, that will be two million more. And Dolby Phase 3, which we expect to come in FY27, FY27. Now, these three put together creates almost 8 million tons of extra production, which will create anywhere between, you know, 9 to 12,000 crores of EBITDA, which is not in my base today. So if you take that out, you realize that even if, as a company, we stretch to 30 to 35,000 crores of KIP expense, a part of it is going to get funded with a new cash I will generate. So if you exclude that, you'll realize that it's from the base, the kind of cash we are creating. We are not going to create very large stress to increase debt. But of course, temporarily debt could still go up. But given where we stand right now, which is at 1.8 midday to EBITDA, and our expectation is this leverage in FY27 perhaps will go slightly better, especially after second tranche of JAPE. We think we'll be very comfortable.

So my basic, my understanding was for... Yeah. Yeah, go ahead, please. Yeah, yeah, I guess my, my, my quick understanding was that the UB is expected in COI 2017. So the incremental benefit would be only from 29 onwards, right? So I think for 28 and 29, that is what my, what I wanted to understand. These two years, there would be some increase in debt, right? If I'm not mistaken.

No, not really, because, you know, you will have JVML, which will actually produce entire 5 million in FY27. Then you will have BF3, which will have some positive uptick in FY27, not fully. That would come in FY28. And in FY28, you will also see Dolby's part volume. Could be small. So this combined will create incremental cash, which you are not seeing in our base yet.

Without Dolby, just to sum up, it's 4 million tons at least you will see between now to FY27, including the BMM volume. That will give you additional cash flow till Dolby comes in. Dolby will start kicking in, let's say, after, let's say, October 27 to December 27 quarter. They will start, let's say, operations and then ramp up capacity.

Thank you. We'll take our next question from the line of Shubhang Jain from Nippon India Mutual Fund. Please go ahead.

Yeah, hi sir. Good evening. Congratulations for the good performance. My first question is, can you help us understand the current raw material consumption norms from the Indian operations like specifically for iron ore and cooking coal for per ton of steel? And also within your cost of goods sold, roughly what percentage is attributable to iron ore and cooking coal?

Well, percentage utilization or the ratio of utilization of iron ore and cooking code is probably depending upon what grade of iron ore we are using and which location and which technology we are using into. So typically, if I were to say, then it is about 1.8 to 1.9 per ton of steel is what the iron ore connection will be. And coking coal, if I could consider purely coking coal, this is about 0.700 kg per ton of steel, it is a typical ratio, what we have, only coking coal, and if we have to add all the coals, it becomes about 950 kgs, depending upon the process, what we are getting into.

Okay, and roughly what percentage is attributable to iron ore and cooking coal in Cox?

Well, it keeps changing or depending on because both are cyclical in nature, but then I would say more about 60% or 60% put together is the cost of cost share of iron, oil and cotton, coal.

Okay, sir. And I have one more question.

Shumam, I request you to join back the queue, please, as we are participants waiting for the term. Thank you. Next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.

Hi, thank you for the opportunity. My first question is on the export. As you said, more and more global economies are getting closed. So if at a point in the next couple of years we have a temporary overcapacity in flat steel in India, which geographies do you think we can still have a market?

Actually, we have modeled the overall flat demand in India. By and large, if you see, flat has been growing at a slightly faster pace. In general, over the past few years. So we see that flood demand will increase. The entry barriers for flood capacity setting up is more. Therefore, in the medium term, maybe between the years of 28 to 30, I see that supply will lag demand. Going forward, if you really look at the overall thumb rule number, If we are incrementally generating about 12 to 14 million tons of incremental demand, roughly about 6 to 7 million tons of flat steel would be the incremental demand. That means you will require to set up at least two hot strip mills because each hot strip mill takes almost two years to fully play out. So at least two hot strip mills should come every year for for you to be able to meet that demand. I do not foresee too much of a problem in the planning which we see. There could be some here, as you mentioned, where if there is any clubbing of capacities which come, then a certain amount would be exported, which is fine. As I mentioned, our OISA facility is on the port, and that can leverage exports into the world. We also have opportunities of... Supplying some green steel to the world, as you know, we have said that Salao would produce low-grade emission steel from natural gas and DRI and renewable energy. That is a natural export model. The third one is that we see that there is a gap in slabs also, which is required internationally. The traded slabs internationally has come down post the Russia, Ukraine, and Iran conflicts. There is a space which has been created in that. That's the third opportunity for exports which is there.

Sure. My second question is actually a bookkeeping question. If you can highlight how much is the iron ore cost increase for 1Q, and what is the tax incidence of the BPSL deal?

The iron ore costs have gone up in the last few weeks. We are trying to reduce and we are trying to do the blending in a manner so that the specific consumption is better. And with that, we will try to moderate the impact of the price increase. It will be slightly higher, but not much from quarter four to quarter one. As far as the bookkeeping question is concerned, on the BPSL tax, something which you asked, you wanted to, can you repeat that part? Yeah, is there any taxidification?

No, so BPSL has had carry-forward losses, unabsorbed depreciation, so the effective tax on this transaction is significantly lower. Those losses were fully utilized. Even on JSW books? Correct. On JSW books. All right. Thank you. That's awesome.

Thank you. Thank you. We'll move on to our next question from the line of Ashish Jain from Aquari, India. Please go ahead.

Hi, sir. Sir, my first question is, you know, on pricing, you know, you made a point earlier that, you know, current prices are still where we were in 2023. But then if I see that in context of, you know, China exports, assuming the China exports drive prices traditionally, they were much lower in 2023. So how do you think about pricing going ahead? Have you come to a point where pricing is more local, irrespective of the safeguard duty? Have you come to that point yet, do you think?

No. I don't think price will always be what is internationally available, and that has to be taken into account. I don't think you can ignore that. But just to give you a number, because we were just going into this as an analysis from our side, China prices in the international market in, let's say, April, May was in the range of $5.50, $5.60 FOB. It was actually slightly higher than what it is today. Today, it's, let's say, in the range of $510 FOB. And on the cost side also, you will see similar structures. India, at that point of time, our total call prices were in the range of 60,000 rupees. You can do your maths, I think. We are not very far from this basket. That's why I compared April 23 to April 26. But, but international prices will always be a guiding factor for the domestic state prices. Right, right.

So, secondly, you know, in terms of the demand, you clearly are very positive in demand. Is it possible to give some colors in terms of which are the key sectors, segments, where we are most optimistic on demand, if you can give some granular color on that?

So, you know, the way infrastructure and construction naturally contributes to a very large part of the overall steel consumption, and that's growing at a very healthy rate. Automotive, if you see from what was expected when we began this year to what we ended this year, automotive growth has been really good. Automotive capacity announcements by major auto producers in the country is also a very healthy number. We are seeing similar kind of traction in the renewable energy sector, and similarly in appliances and others. So, if you were to sum up, infrastructure, manufacturing, including automotive, renewable energy. These are moving at a fast pace.

Ashish, I request you to join back the queue, please, as we are participants waiting for their time. Thank you. Next question is from the line of Rashi from Siti. Please go ahead. The question was mentioned that the cost increase is expected to be about 3,000 rupees.

So, apart from cooking, where are you expecting them to be?

Yeah, cooking coal, our expectation is between $12 to $15.

So the last part of the increase would be somewhere around, the exchange rate is for sure one of the cost element and the sea freight has gone because there's a large part is seaborn trade also for us, whether it's an import of cooking coal or other coal or coastal movement. So that impacts. And the fluxes because the Middle East is... There's one region where all the fluxes are coming. So that gas impacted and the damage incidences are increasing there. Gas would be very, our exposure to gas is just about five to six percent of the total production volume. So it won't impact much to us, but it's still in the sea we generally get impacted because of the gas prices.

And on account of iron ore, maybe we factor five percent quarter four to quarter one on

And when you say the exposure to gas is 5-6%, my understanding was that the gas impacted mostly your downstream production. Is there any upstream exposure as well?

Don't be, you're talking about natural gas exposure, right?

Yes.

Natural gas exposure, natural gas exposure to downstream is not there. Natural gas is basically used. In Dolby, in our operations to some extent, but as Arun explained, it's a very small percentage of our overall requirements. Downstream uses a little bit of LPG, but we have been converting to different fuels and therefore we are able to mitigate some part of the impact of the LPG pricing.

Thank you.

You're using liquefied materials.

Understood. Thank you. Next question is from the line of Ritwik Sheet from OneUp Financial. Please go ahead.

Hi. Good evening, sir. So, a couple of questions. Sir, what will be the share of our JV investments in this 2.5 lakh growth?

See, for the JV investment, they... Yeah, first of all, as I said, 126,000 crores plus, at the most, another 100,000 crores. It could be a little lower, but at the most, another 100,000 crores. The JV investment will only be in form of equity, and so if you typically take a project which we are doing, let's say, we are doing BF6, for example, right now, for which the expansion, which we have just announced, 26,000 crores, if you were to take that as a benchmark between 25,000 to 30,000 crores, Equity would be for any project of this would be about 8 to 10,000 crores. So in a project like this, our share of the equity would be close to 4 to 5,000 crores in each of these projects. So that means two projects multiply by two.

Got it. And so what is the outlook for the OSE subsidiary for FI27?

FI-27 U.S. operations have, you know, the vacuum degassing modification and our caster modification for dynamic soft reduction has taken place. They are in the process of stabilizing. That will enable them to produce higher grades. So one, that is value-operative. The volume also, which we lost on account of the shutdown at Ohio upgradation, that will come back. Baytown upgradation is getting completed, and that should start operations in quarter two of this financial year, by the end of quarter two of this financial year, and gradually ramp up. So these two combined will give you a better profitability going forward in the U.S. operation. Italy also, the sales volumes are likely to be better.

Yeah, sales volumes will be better, and the product mix and the market mix looks to be much better this year. So we would get a better overall financial performance.

So overall, both assets will show better performance with FI26.

Okay. Got it.

Thank you. Next question is from the line of Jashandeep Singh Chadha from Namora. Please go ahead.

Hi, thank you for the opportunity and congratulations, you know, for a good set of numbers. So my first question is, you know, one of, you know, participants have already asked. So just wanted to put the net date again into context. So asking in another way, so in the near term and in the sustainable, you know, how do you, how do JLW still look at its leverage? So how is management, how much is management targeting the net data in the near term and also sustainably? So just wanted to understand the peak and, you know, sustainable data work will be.

I think when Jayan, in his opening speech, did mention it, we have revised our upper limit headroom from 3.75 down to 3.6. And that basically means we are much more comfortable even while we are in this kit exam. Instead of giving an absolute net debt number, our preference will be to track the leverage ratios.

As you said, we are hopeful of a lower net debt to EBITDA numbers. Therefore, we have revised our cap, and we are comfortable below 2.5.

Understood, sir. And so my next question is a little structural in nature. I just wanted to understand when we look at your JV expansion plans, JSW expansion plans, for the next decade also we see that a large glass furnace will govern the expansion stage, right? So how far is India actually investing in scrab-based EF or EF, you know, assets? So how will last one is keep on updating the expansion in the near decade as well?

Thank you. So, even in our today's mix, if I were to see, I think about more than maybe close to one-third or 30 percent plus is electric arc furnace-based. Going forward, we have mentioned that we would be putting up a facility in Salau of 4 million tons for green steel, which will be against DRI and scrap-based. We are also now adding scrap processing facilities, and in the country, we are beginning with west, then we will add one more in south, which we have already started creating a supply chain for scrap buying, and that's improving every year. So we are increasing scrap collection and putting it back into our furnaces. So that will further, even in the converters, if you do that, it will further bring down your... Overall emissions. But having said that, we must be conscious of the fact that India doesn't have too much of scrap generation as we speak. It will take time for India to generate scrap on its own. Scrap availability from Europe or from U.S. may go down with their own focus on scrap-based production. The cost of steel or the cost of the technologies are also higher. For now, the best technology for India is blast furnace-based and using various technologies to reduce the emissions from the blast furnace-based steel. Oil consumption, circulating gases back, using recovery gases and putting it back into the blast furnace to reduce your net coal. All those dehumidifiers, various technologies are being used to reduce the emissions from the blast furnace. That combination with the grade of iron ore we have makes better sense.

Thank you. Next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.

Hi, thank you for taking my question. So industry demand grew by 8% in fiscal 26, while you grew by 12%. And if I adjust the numbers for BPSL and BMM, you are guiding for, again, 12% growth for fiscal 27. Does that mean that you remain confident that the industry would grow at around 8%? That is number one. And one related question I have is your capacity expansion guidance is at around 12% CAGR through the years. So does that mean that you would continue to grow at around 1.5% of the industry continuously for the next few years? Thank you so much.

Yeah, I think, you know, we all of us agree that, you know, India will be growing close to about 7% of GDP, and the elasticity for steel growth is close to 1.3 times to the GDP. And we have seen this in the past several years. Our guidance is about 8% to 9% or 7% to 9% will be the growth in the steel market in the coming year. And the way India is growing, the way India is likely to be, we have no doubt that it will be growing close to about 89% of the seed size. Now, this is the overall seed. Out of which, flat steel is part of it, and we are largely getting to the flat steel. And we have no doubt that about 10 to 12% of market sales growth for JSW would be a challenge on those lines. So we are quite confident on that.

So our growth for sales for this year is about 10%.

So, if I adjust BPSL from the base and BMM from fiscal 27, that implies around 12% growth, right?

No, the way we have given our guidance is excluding BPSL and including BMM.

Right, exactly. So, if I adjust BPSL from fiscal 26 base as well, your growth would be more like 12%, right? That's right.

It will be adjusted growth from BPSL, if you're net-off, according to me, it's about 10%. Our investment is 10% and the production is 13%. But they can clarify that too, if there is any problem. We can reconcile that also.

Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the comments over to management for closing comments. Over to you.

So, thank you, operator. Just one clarification I would like to make this question. We've got some queries, you know. So, regarding the accounting impact of DPSL, we have a slide with number five in the presentation. Kindly refer to that. DPSL has been deconsolidated at March end. And the numbers for BPSL will not be part of the financials of the EBITDA, it will be equity adopted, and there is a line in the P&L which says it's from Associates and Joint Ventures, so that's where BPSL financials would sit. So over to Obastacharya, any closing comments? I think as we highlighted, we had a transformation here. Our operational performance has been strong. Our balance sheet is much stronger, and we have deliberated, making the foundation for the next phase of growth. We have targeted 62 million tons in India by FI32, in addition to the joint ventures, which would cumulatively add 16 million tons. We believe that India-centric growth, India has been a very long-time growth story for a decade or two, and we would be able to Support that growth in the industrial ecosystem in India. Thank you very much. If you have any other questions, please reach back to the investors. Thank you.

Thank you, members of the management team. On behalf of JSW Steel Limited, that concludes this conference. Thank you for joining us, and even now, let's connect your lines.