Jindal Steel's capacity expansion holds the key to re -evaluation after a modest Q1

Copyright © HT Digital Streams Limit all rights reserved. The management of Jindal Steel led for the FY26 sales volumes of 8.5-9 million tonnes, higher than 8 MT in FY25. (File Photo: Bloomberg) Summary Jindal Steel’s results in June quarter showed a modest growth, but the company’s aggressive expansion of capacity, lower input costs and the upcoming project commissioning can drive earnings recovery and a potential stock assessment in FY26. Jindal Steel Ltd (formerly Jindal Steel & Power Ltd) reported a year-on-year increase in consolidated EBITDA for £ 3,000 for the June quarter (Q1FY26), even if volumes fell by 9%. The figure is adjusted for foreign exchange variation. Ebitda per tonne rose 16% to £ 15,680, aided by a sharp drop in raw material costs. Lower volumes dropped the turnover by 10% to £ 12,300 crore. Average realization rose 4.5% to £ 64,700 per tonne, but dropped 0.7% compared to a year earlier. Steel prices celebrated after the security duty was imposed in April, but has since been softened with the early arrival of the monsoon, 5-7% in the second quarter. However, the impact on profits can be limited, as it is expected to be poorer realized by lower coal costs. The most important driver for Jindal is the implementation of his expansion projects. Inputing a new oven is expected in August, while a steel repair must increase after mounting in the second half of FY26. In the first quarter, the company commissioned its first continuous galvanizing line and an oxygen plant, expanding the added value product capacity. In Q2, the 4.6 MTPA OOND II and 3 MTPA basic oxygen oven II are planned for commissioning, along with the UTKAL B1 coal block, which allows 100% in the prisoner of coal. Jindal’s management led for the FY26 sales volumes of 8.5-9 million tonnes (MT), from 8 MT in FY25, with about 1 MT coming from the new capacity. Nuvama Institutional Shares project Jindal’s Ebitda to almost double between FY25 and FY27, with volumes growing at a 19% CAGR, compared to just 1% during FY22-25. The company has already spent more than £ 28,000 of its planned £ 47,000 crore capital expenditure. For FY26, it budgeted £ 9,600 crore. Rising Capex and Working Capital Requirements pushed net debt-to-ebitda to 1.49x in Q1, from 1.26x in Q4FY25. The working capital is expected to normalize in the coming quarters. Management confirmed a 1.5x shell for the ratio, a sharp improvement of 4.6x in FY20. The share has so far traded largely flat in 2025 and looks quite valued at an enterprise value of 9,3x FY26 estimated ebitda. The track will depend on the price trends to the monitic steel and how quickly the new capacity arises. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Mark to Maket #jindal Steel & Power #jindal Steel Read Next Story