JSW Steel Q1 Profit Jumps 158% to ₹2,184 Cr

JSW Steel Ltd., one of India’s largest steel producers, has reported an outstanding 158% year-on-year (YoY) increase in consolidated net profit for the first quarter of fiscal year 2025-26 (Q1 FY26), rising to ₹2,184 crore. This is a significant jump compared to ₹846 crore in the same quarter last year. The surge in profit comes even as the company’s revenue remained flat during the quarter, highlighting improvements in operational efficiency, cost controls, and product mix.

This stellar performance is a positive signal not only for the company but also for the broader steel industry in India, which has been grappling with volatile raw material prices, fluctuating demand, and global economic uncertainty.

Financial Highlights – Q1 FY26

Here’s a snapshot of JSW Steel’s financial performance in Q1 FY26:

What Drove the Profit Surge?

Despite flat revenue growth, several factors contributed to the strong bottom-line performance:

1. Improved Operating Efficiency

JSW Steel has invested significantly in modernizing its plants and implementing cost optimization strategies. This helped reduce per-tonne costs even in a challenging commodity price environment.

2. Favorable Raw Material Prices

While steel prices globally have remained under pressure, JSW Steel benefited from a decline in raw material prices—particularly coking coal and iron ore—which helped improve margins.

3. Higher Steel Production

JSW Steel’s crude steel production rose 7.3% YoY to 6.29 million tonnes, enabling higher sales volumes both domestically and internationally. This volume growth helped partially offset pricing pressures.

4. Better Product Mix

A strategic focus on value-added and high-margin products like galvanized steel, automotive-grade steel, and pre-painted products helped enhance profitability.

5. Subsidiary Performance

JSW Steel’s overseas subsidiaries and joint ventures, especially in the U.S. and Italy, showed stable performance, reducing the drag on consolidated earnings seen in previous quarters.

Domestic Market Demand

The Indian economy continues to show resilience with strong demand from key sectors such as construction, infrastructure, and automotive. The government’s continued thrust on infrastructure through public spending, especially on roads, railways, and housing, is driving demand for long and flat steel products.

JSW Steel’s domestic sales volume grew nearly 4% YoY to 5.59 million tonnes. The company has also seen stable demand from original equipment manufacturers (OEMs), white goods producers, and real estate developers.

Global Steel Outlook and Impact

Global Challenges

Globally, the steel industry has been under pressure due to a combination of slowing economic activity in Europe, overcapacity in China, and rising geopolitical tensions. Despite these headwinds, JSW Steel has managed to maintain its global competitiveness, especially in North America.

Exports

JSW Steel’s export share remained stable at 10-12% of total sales. However, the company remains cautious about global demand outlook, especially in the wake of uncertain Chinese demand and elevated shipping costs.

Management Commentary

JSW Steel’s Joint Managing Director & Group CFO, Seshagiri Rao, stated:

“We have delivered robust growth in net profit driven by higher volumes, better cost management, and improvement in product mix. Our EBITDA per tonne improved significantly and we continue to focus on disciplined capital allocation.”

He also mentioned that the company is optimistic about the domestic steel consumption outlook, supported by a strong government capex pipeline and revival in the private investment cycle.

Capital Expenditure and Capacity Expansion

JSW Steel continues to progress on its major capacity expansion projects, aiming to reach a crude steel capacity of 37 MTPA (million tonnes per annum) by FY30 from the current ~29 MTPA.

Key Ongoing Projects:

• Dolvi plant expansion is now fully operational.
• Bhilai and Vijayanagar upgrades are on track.
• JSW Vijayanagar Greenfield Project in Karnataka is expected to contribute significantly to future capacity.

In Q1 FY26, JSW Steel incurred a capex of ₹3,400 crore and expects full-year capex in the range of ₹18,000 crore.

Debt Position

JSW Steel has maintained a healthy balance sheet. Net debt stood at ₹61,402 crore as of June 30, 2025, slightly up from ₹59,345 crore in the previous quarter, due to higher capital spending. However, net debt-to-EBITDA ratio remains under control at 2.4x, indicating financial stability.

The company also continues to maintain strong credit ratings from agencies like CRISIL and ICRA.

JSW Steel Share Price Reaction

Following the announcement of Q1 results, JSW Steel’s share price saw a 2.3% intraday rise, reflecting positive investor sentiment.

BSE Closing (Post-results): ₹888.20
Previous Close: ₹869.35

Market analysts believe the profit surge, along with improved EBITDA margins, could lead to further upward momentum in JSW Steel’s stock in the coming quarters.

Analysts’ Take

Brokerages have largely retained a positive outlook on JSW Steel post-Q1 results.

Key Views:

• Motilal Oswal: Retains “Buy” rating with a target price of ₹950. Believes JSW Steel’s volume growth and better-than-expected margins are strong positives.
• ICICI Securities: Notes operational efficiency is key driver; sees upward revision in FY26 EPS.
• CLSA: Maintains “Outperform” rating; highlights stable domestic demand and cost advantage.

Challenges Ahead

Despite a strong quarter, JSW Steel still faces several challenges:

1. Global Demand Uncertainty
   Macroeconomic pressures in the U.S. and Europe could impact global steel prices.
2. China’s Steel Policy
   China’s export policies and production cut decisions will continue to influence global pricing dynamics.
3. Input Price Volatility
   Any upward movement in coking coal or iron ore prices can hurt margins.
4. Environmental Regulations
   JSW Steel must comply with tighter ESG standards and carbon emission norms, which could raise operational costs over the long term.

Sustainability Focus

JSW Steel is actively investing in green steel initiatives, aiming to reduce its carbon footprint in line with India’s 2070 net-zero goals. Initiatives include:

• Hydrogen-based steel production pilot projects
• Energy-efficient blast furnaces
• Use of renewable energy in operations

The company has also published its annual sustainability report, which shows steady progress on emissions reduction, water usage, and circular economy practices.

Outlook for FY26

JSW Steel remains optimistic about its performance in the coming quarters.

Key growth drivers:

• Domestic infrastructure boom
• Stable raw material pricing
• Commissioning of new capacity
• Increase in value-added product sales

Management has guided for a total crude steel production of 27.5-28 MTPA in FY26, implying a ~5-6% growth YoY.

Conclusion

JSW Steel’s Q1 FY26 results reflect a strong rebound in profitability, backed by efficient operations, stable domestic demand, and a resilient strategy. While global uncertainties persist, the company’s robust fundamentals, consistent capacity expansion, and sustainability push place it on a solid path for long-term growth.

As India continues to be a bright spot in global steel demand, JSW Steel is well-positioned to be a leader in the evolving landscape—balancing profitability, sustainability, and innovation.