JSL - Jindal Stainless Limited Share Price

In the earnings call for Q1 FY '26, Jindal Stainless management highlighted several positive trends and outlooks. Key points include:

1. Sales Volume Growth: Sales volume grew by 8% year-on-year and remained steady quarter-on-quarter, amounting to 626,252 metric tons. This growth is attributed to strong domestic demand across various sectors, including automotive, infrastructure, and consumer goods.

2. Performance in Sectors: Specific segments showed improvement, with significant deliveries to the auto sector due to an increase in special grade materials. The management noted increased adoption of stainless steel in large-scale infrastructure projects, emphasizing a shift towards sustainable materials.

3. Financial Highlights: The company achieved an EBITDA of Rs. 1,310 crores (up 8% YoY and 23% QoQ) and a PAT of Rs. 715 crores (up 11% YoY and 21% QoQ).

4. Debt Position: Net debt was reduced to Rs. 3,869 crores, with a net-debt-to-EBITDA ratio of 0.81 and net debt-to-equity ratio at 0.22, indicating a healthy balance sheet.

5. CAPEX Guidance: The management provided a CAPEX guidance of Rs. 2,700 crores for FY '26, with approximately Rs. 665 crores already spent in Q1.

6. Market Strategy: Due to a dynamic global trade environment, the company is prioritizing the domestic market while remaining flexible in its market strategies.

7. Sustainability Initiatives: The company achieved a 14% reduction in GHG emissions in FY '25, received LEED Platinum Certification, and is compliant with CBAM reporting requirements.

8. Production Capacity: The Chromeni subsidiary's utilization reached 60%-65%, with the goal of escalating to 80%-85% by H2 FY '26.

The management remains optimistic about sustained domestic demand and expects continued volume growth of 9-10% for FY '26, supported by infrastructure-led consumption and strategic expansions.

Here are the major questions asked during the Q&A section along with detailed responses:

1. Question: "Could you highlight the performance of Rathi and the progress of ongoing CAPEX at Jajpur plant regarding downstream capacities and logistics infrastructure?" Answer: "Rathi is currently operating at about 80% to 85% capacity utilization. We initially aimed for more rebar production, but around 70% has been wire rod so far. We're working to increase rebar production, expecting improvement in the upcoming quarter. For CAPEX, our guidance for FY '26 is Rs. 2,700 crores; we have already spent Rs. 665 crores in Q1, and we are on track with our plans."

2. Question: "Do you see the defense sector, especially for marine platforms and aerospace, as a promising segment for us?" Answer: "Absolutely, while volumes are currently low, they are of high value and prestige. Our goal is to be self-sufficient in special grades and cater to the defense sector, which we see as important for our growth as we serve the army, navy, and aerospace sectors."

3. Question: "Can you help us understand the improvement in EBITDA per ton, considering various factors?" Answer: "Yes, the improvement is primarily due to an increased product mix and the value-added products we have introduced, like special grades in automotive and other sectors. Our guidance of Rs. 19,000 to Rs. 21,000 EBITDA per ton remains unchanged, reflecting confidence after a low Q4."

4. Question: "What is the update on the blast furnace of 2 million tons under the promoter entity?" Answer: "There has been some delay in the blast furnace operation. It's still early to give a comprehensive update, so I prefer to discuss this offline for clarity."

5. Question: "Can you clarify the status of the Maharashtra project and its capacity?" Answer: "The Maharashtra project is still on track for a 4 million ton capacity, with phase one at 1 million tons. While we haven't finalized CAPEX for phase one yet, we are targeting FY '29 - '30 for completion."

6. Question: "How has the recent BIS compliance impacted imports and overall quality?" Answer: "The BIS regulations have helped restrict inferior quality imports, increasing the demand for higher-quality domestic products. This is a positive development, and we hope the regulations will support industry standards over time."

7. Question: "What is the outlook for nickel prices and how will they affect our operations?" Answer: "It's challenging to predict nickel prices; we expect them to stabilize around Rs. 14,000 to Rs. 16,000. Our focus is on maintaining our EBITDA guidance regardless of nickel fluctuations since we don't speculate but practice natural hedging."

8. Question: "Have you seen a significant change in domestic demand and your growth strategy?" Answer: "We're optimistic about domestic demand growth and are focusing on maximizing EBITDA. We won't export unless there's a compelling opportunity, as our primary goal is to meet domestic demand efficiently."

These summaries encapsulate the queries posed and the associated responses, ensuring clarity on key points discussed during the earnings call.