JSW Steel Forges Ahead with Strong Q2 FY26 Performance Amidst Global Headwinds

JSW Steel has demonstrated a robust performance in the second quarter of fiscal year 2026, navigating a complex global economic landscape with resilience. The company reported a consolidated revenue from operations of ₹45,152 crore, marking a significant increase from the previous year. Adjusted EBITDA stood at ₹7,849 crore, reflecting an EBITDA per tonne of ₹10,701 and an operating margin of 17.4%. Profit after tax (PAT) saw a substantial rise to ₹1,646 crore, compared to ₹404 crore in Q2 FY25, underscoring the company's strong operational execution and strategic initiatives.

The quarter was characterized by record-breaking operational volumes. JSW Steel achieved its highest ever consolidated crude steel production at 7.90 million tonnes, a 17% year-on-year (YoY) increase and a 9% quarter-on-quarter (QoQ) growth. Consolidated steel sales also reached a new high for Q2, totaling 7.34 million tonnes, up 20% YoY and 10% QoQ. This impressive performance was primarily driven by the ramp-up of new capacities at BPSL and JVML-Vijayanagar, coupled with healthy domestic demand that outpaced the seasonally weak monsoon quarter.

Financial Highlights

Here is a summary of JSW Steel's consolidated financial performance:

Strategic Growth and Operational Excellence

JSW Steel's strategic focus on capacity expansion and operational efficiency continues to yield positive results. The Indian operations delivered their highest ever production at 7.66 million tonnes, up 16% YoY, and the second highest ever sales of 7.07 million tonnes, up 19% YoY. Domestic sales, at 6.33 million tonnes, grew 14% YoY, significantly outpacing the Indian market growth of 8.9%. The Value-Added and Special Products (VASP) sales reached a record 4.31 million tonnes, contributing 64% to total sales, reflecting a 20% YoY increase.

The company is also making significant strides in its sustainability agenda. It has commissioned India's first green hydrogen electrolyser, a 25 MW facility producing 3,800 tonnes of green hydrogen annually, a major step towards reducing GHG emissions. Furthermore, 885 MW of renewable energy capacity has been commissioned, with plans for an additional 2.5 GW generation and 320 MWh battery storage approved for the coming years. Digitalization and AI integration are being embedded across core operations to enhance productivity, safety, and customer experience.

Future Outlook and Capital Allocation

Looking ahead, JSW Steel remains optimistic about the Indian steel consumption outlook, projecting an 8-9% growth for the financial year. The management expects domestic demand to be seasonally strong in the second half of FY26, bolstered by government and private capital expenditure. The company has provided a guidance of 30.5 million tonnes for production and 29.2 million tonnes for sales for FY26.

JSW Steel's capital allocation strategy is disciplined, with a total planned Capex of approximately ₹69,000 crore for H2 FY26 and the next 3.5 years, with an annual spend of around ₹20,000 crore, primarily funded through internal accruals. Key projects include the Dolvi Phase-III expansion from 10 to 15 million tonnes by September 2027, and the commissioning of a 1 million tonne EAF plant in Kadapa by FY29. The company's net debt to equity stands at 0.93x and net debt to EBITDA at 2.97x, well within its stated caps, demonstrating prudent financial management.

Raw Material Security and Market Dynamics

To ensure raw material security, JSW Steel is strengthening its portfolio of iron ore and coking coal assets. This includes operating 12 iron ore mines in Karnataka and Odisha, with three new mines in Karnataka expected to start in Q1 FY27. The company also increased its stake in Illawarra Coking Coal Mines in Australia to 30% and is in the process of acquiring the Minas de Revuboe Project in Mozambique. These initiatives aim to reduce logistics costs and reinforce raw material self-sufficiency.

Despite a seasonally weak quarter, steel prices have stabilized post-monsoon, and the management anticipates improvement in November-December. While imports have seen a QoQ spike, the company is vigilant and expects government measures to ensure fair trade. JSW Steel's proactive approach to capacity expansion, raw material security, and technological adoption positions it strongly for sustained growth in the dynamic steel industry.

Conclusion

JSW Steel's Q2 FY26 performance underscores its strategic clarity and disciplined execution. The company's focus on expanding high-value product segments, enhancing operational efficiencies, and committing to sustainability initiatives, all while maintaining a strong financial profile, positions it as a leader in the Indian steel sector. With robust domestic demand and ongoing strategic projects, JSW Steel is well-prepared to capitalize on future growth opportunities and deliver long-term value to its stakeholders.