JSW Steel's ₹2 Trillion Capex Plan to Hit 56 MT by FY31

Introduction

JSW Steel, India's largest steelmaker, has significantly accelerated its growth plans, announcing a massive investment of over ₹2 trillion by the financial year 2031. The company has also revised its production capacity target upwards to 56 million tonnes (mt) per annum, a substantial increase from its earlier guidance of 51 mt. This strategic move, detailed by Joint Managing Director and CEO Jayant Acharya, underscores the company's strong confidence in India's domestic demand story amidst global economic volatility and increasing trade protectionism.

A Strategic Bet on India's Growth

The decision to ramp up investments is primarily fueled by the robust and growing demand for steel within India. According to Acharya, Indian steel demand is increasing by 10-12 million tonnes every year. This provides a compelling opportunity to divert production to the domestic market where benefits are maximized. The company's leadership believes that India's stable political environment, large-scale economic reforms, and massive push in physical, social, and digital infrastructure create an unparalleled growth landscape. This contrasts with the global market, which is facing challenges from geopolitical tensions, tariff wars, and protectionist measures like the Carbon Border Adjustment Mechanism (CBAM).

The Investment and Expansion Blueprint

JSW Steel has laid out a clear roadmap for its capital expenditure. A total of ₹1 trillion will be spent over the next four to five years to fund a series of brownfield and greenfield projects. Key projects include the first phase of the new plant in Jagatsinghpur, Odisha, and its subsequent second phase. Other significant expansions are the addition of a sixth blast furnace at the Vijayanagar plant, the development of a green steel facility at Salav, and investments in joint ventures with global giants like JFE Steel and Posco. This comprehensive plan is designed to add approximately 25 mt of new capacity.

Capacity Expansion Roadmap

The company's expansion will be systematic, aiming to solidify its position as a dominant player in the Indian market. The majority of the new capacity will be located within India, reflecting the strategic focus on domestic consumption.

This expansion will also be supported by investments in mining operations, digital infrastructure, and downstream production capabilities to ensure an integrated and efficient value chain.

Financial Performance and Market Outlook

JSW Steel demonstrated strong financial health in its recent quarterly results. For the third quarter of FY26, the company reported a consolidated net profit of ₹2,139 crore, a significant jump from ₹717 crore in the same period of the previous year. Revenue from operations grew by 11% to ₹45,991 crore. Despite multi-year low steel prices in the last quarter, management is optimistic about Q4. Acharya noted that prices began recovering at the end of December, and a stronger demand environment in the fourth quarter is expected to support further price improvements, helping to offset rising coking coal costs.

Navigating Global Headwinds and Trade Barriers

While the focus is domestic, JSW Steel remains a key global player. The company is navigating the complexities of the EU's Carbon Border Adjustment Mechanism (CBAM), with Acharya expressing confidence that established customer relationships will ensure continued sourcing from credible suppliers like JSW. However, the broader trend of rising tariffs to protect domestic markets is a significant concern. The company has welcomed the Indian government's implementation of a phase-wise safeguard duty, starting at 12%, as a necessary step to prevent the dumping of cheap imports. While Acharya believes a higher duty would have been more effective, he acknowledges that it sends a clear message from the government against unfair trade practices.

Securing the Supply Chain

To support its ambitious expansion, JSW Steel is strengthening its raw material security. The company has set a target to source approximately 50% of its iron ore requirement from captive mines by FY31. For coking coal, a critical imported raw material, the goal is to achieve 25% captive sourcing. This strategy is aimed at de-risking the supply chain, managing input cost volatility, and improving overall operational efficiency.

Addressing Regulatory Scrutiny

JSW Steel is currently involved in a Competition Commission of India (CCI) investigation regarding alleged price collusion among several steel companies, a case dating back to 2021. Responding to this, Acharya stated that the company is fully confident in its compliance with all applicable laws. He argued that the case lacks merit, pointing to the highly volatile nature of prices for products like TMT bars, which saw a drop of ₹7,000 per tonne in a single quarter, making it difficult for producers to cover basic costs, let alone collude for price advantages.

Conclusion

JSW Steel's decision to invest over ₹2 trillion and target a 56 mt capacity by FY31 marks a pivotal moment for the company and the Indian steel industry. By anchoring its strategy in India's strong domestic growth, the company is positioning itself to capitalize on the nation's infrastructure boom while navigating a challenging global trade environment. This ambitious plan, backed by strategic investments in capacity, technology, and raw material security, sets the stage for JSW Steel to play a central role in building a self-reliant India.