JSL - Jindal Stainless Limited Share Price

During the earnings call held on May 9, 2025, management provided a positive outlook for Jindal Stainless Limited. The Indian economy is projected to grow at 6.2% in 2025 according to the IMF, which will benefit the stainless-steel sector. For FY '25, the company reported a 9% year-on-year increase in sales volume driven by strong domestic demand from sectors like railways, automotive, and infrastructure. Management highlighted that sales volume reached 642,641 metric tons in Q4, a 13% increase year-over-year.

Management provided a consolidated EBITDA guidance for FY '26 of Rs. 19,000 to Rs. 21,000 per ton, indicating expectations of improved margins compared to Q4 FY '25, which was impacted by pricing pressures and negative inventory valuation. They anticipate a volume growth of 9% to 10% for FY '26 and an optimism for a 25%-30% growth in export sales, despite a prior 24% drop in exports during FY '25.

The company has also made strategic investments, including a 9.62% stake in M1xchange to strengthen its supply chain. They asserted that their balance sheet remains robust with net debt maintained at Rs. 4,005 crores, reflecting effective working capital management.

On the sustainability front, Jindal Stainless now operates the largest captive solar plant in Odisha with over 30 megawatts capacity, aiming to meet around 30%-35% of power consumption through renewable sources by the end of ongoing projects.

In terms of expansion, the Maharashtra plant is set to potentially reach 4 million tons capacity over 15 years, underlining their commitment to long-term growth strategies. Overall, management displayed confidence in navigating macroeconomic challenges and capitalizing on domestic growth opportunities.

Question 1: "Now, in Q4 we saw EBITDA per ton dropping below Rs. 14,000 after quite a few quarters. So, I just wanted to understand the profitability trajectory from here, because export sales do not seem to be going up as a percentage of overall, and other conditions possibly remain similar. So how do we see EBITDA per ton trajectory going from here and what would be the guidance for FY "˜26?"

Answer: Thank you, Amit. We are already seeing some improvement in our EBITDA per ton margin in Q1 of FY '26. Our consolidated guidance for the year is now between Rs. 19,000 to Rs. 21,000 EBITDA per ton. We also expect a 25% to 30% growth in our export volume compared to the previous financial year, which should further bolster our profitability.

Question 2: "We signed an MOU with the Government of Maharashtra for a considerable investment. Are we still evaluating both the Chromeni and Maharashtra options for expansion?"

Answer: We are indeed evaluating both locations. Maharashtra is proving to be more favorable due to support from the government and proximity to our major customer base. We plan to prioritize Maharashtra for our next large growth plant, while we continue to explore opportunities at Chromeni.

Question 3: "This figure of Rs. 19,000 to Rs. 21,000 is a standalone figure, right, not including JUSL?"

Answer: No, it is a consolidated figure, including JUSL and other operations. We prefer to provide this comprehensive guidance to avoid confusion related to individual entities.

Question 4: "The CapEx guidance for FY '26 and '27?"

Answer: For FY '26, we are guiding around Rs. 2,700 crores. The CapEx plan will cover both spillover projects and existing new investments. As for FY '27, greater clarity will be provided mid-year as we finalize our plans.

Question 5: "Have we done any representation with the government regarding high imports of stainless steel in the country?"

Answer: Yes, we maintain ongoing dialogue with the government, advocating for anti-dumping duties on stainless steel, especially since recent data shows that global protectionism is impacting the Indian market. We plan to apply formally soon.

Question 6: "What is the status of our Indonesian JV and Jajpur downstream capacity commissioning?"

Answer: Our Indonesian JV is on track, expected to be operational by mid-next year, while our Jajpur downstream expansion is also anticipated to be completed around the same timeframe.

Question 7: "What kind of profitability are we generating from our nickel pig iron (NPI) project?"

Answer: The NPI project is ramping up, and we expect to reach 75%-80% capacity in the next quarters. Given the current volatility in nickel pricing, while profitability fluctuates, the long-term strategic advantage of raw material security is key for us.

Question 8: "What are the reasons for the recent EBITDA per ton drop in Q4?"

Answer: The drop was primarily due to falling nickel prices and trade uncertainty after tariff announcements, which forced us to push more volume into the domestic market. We aim to navigate these challenges while focusing on recovery in Q1, indicating a positive trajectory.

Question 9: "What is the estimated net debt at the end of FY "˜26?"

Answer: We are estimating our net debt to be around Rs. 3,500 crores to Rs. 3,700 crores by the end of FY "˜26, reflecting our focus on maintaining a strong balance sheet despite significant investments.

These responses reflect the major themes and queries from the Q&A session of the earnings call, maintaining clarity and precision throughout the answers.