Event Participants
Executives
6 Angad Khurana, Abhyuday Jindal, Kapil Arora, Kunjal Mehta, Tarun Khulbe, Abhishek Tambi
Analysts
10 Alok Deora, Amit Dixit, Ashish Kejriwal, Parthiv Jhonsa, Pinakin Parekh, Ritesh Shah, Ritwik Sheth, Satyadeep Jain, Sumangal Nevatia, Tushar Chaudhari
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue growth | +10.5% YoY | Resilient growth despite gas shortage and logistics disruptions in April 2026; absolute value not disclosed |
| EBITDA growth | +1.4% YoY | Supported by value-added product mix shift and thinner product segments; subsidiaries largely held despite production disruptions |
| PAT growth | +7.7% YoY | Maintained profitability through adverse cost environment; aided by prudent cost management |
| Finished goods sales volume | -7.3% YoY | Impacted by industrial gas unavailability (LPG/propane restrictions) and logistics uncertainties in early April; production balance affected for first few weeks |
| Net debt | ₹2,950 crore | Further reduction from prior levels on stronger balance sheet and prudent fiscal management |
| Net debt-to-EBITDA | 0.53x | Comfortably below 1.0x; reflects deleveraging progress |
| Net debt-to-equity | 0.14x | Balance sheet strength supporting ongoing CapEx program without strain |
| Capacity utilization | ~69-70% (Q1 end) | Suppressed by gas shortages during the quarter; management confirmed production back to pre-war levels as of call date |
| EBITDA per ton guidance (H1 FY27) | ₹18,000-20,000 | Guidance maintained; management to revisit at Q2 if any change required |
| Export mix | ~10% of sales volume | Stable absolute volumes QoQ; higher share reflects lower domestic sales base; Europe+US ~60% of exports, Europe alone 30-40% |
| Grade mix (200/300/400) | 35%/47%/18% | 300 series elevated due to selective selling focus on value-added, high-nickel grades during disruption quarter |
Geographic & Segment Commentary
Domestic Market: Demand remained steady across automotive, appliances/white goods, railways, and metro segments. Railway demand is supported by transition from ferritic to austenitic stainless steel in Vande Bharat train sets, with ICF Chennai's K-RIDE (Karnataka) specification mandating high-strength austenitic stainless steel for coach shells and underframes. Demand was never an issue in Q1 — only supply/production constraints.
Exports: Absolute export volumes stayed consistent QoQ despite challenging global trade environment. Management is actively developing Japan, South Korea, EU, and Americas, targeting only premium-grade products with high margin profiles (cannot compete on vanilla grades vs. local mills). Japan entry has been a notable breakthrough given its stringent quality requirements. Europe/U.S. combined ~60% of exports; Europe quota system is reducing European volumes, offset by new market development.
Indonesia (PT GMI): 1.2 MTPA stainless steel melt shop now ramping up after completing local approvals/certifications. Partner-operated; management targets 70-80% capacity utilization by FY27 end based on partner's track record. Status changed from subsidiary to associate effective July 1, 2026 — board control ceded to partners post-construction phase; contractual right to source slabs for India unchanged, no business plan change.
Chromeni & Rathi (Subsidiaries): Chromeni ran at 80-85% utilization and was the "major savior" in Q1 as the only plant fully on pipe natural gas during the disruption. Rathi operated at ~70% utilization, impacted by fuel availability, targeting ~80% run-rate. Rabirun remains small (polishing business) pending cold rolling investment operational in FY28.
Company-Specific & Strategic Commentary
Brand Transformation: Continued consumer-facing push with nationwide print/TV campaign featuring brand ambassador Ranveer Singh, Sunrisers Hyderabad co-branded digital/stadium activations, and official Super Sixes partner on Jio Hotstar/Star Sports for India-Afghanistan series to build top-of-mind recall ahead of consumption-led stainless steel demand growth.
Energy Diversification: Introduced pipe natural gas at Jajpur in response to Q1 LPG/propane restrictions; similar plans on track for Hisar and Ghaziabad. Green hydrogen expansion: 90 Nm³/hr at Hisar (another 200 Nm³/hr over next two quarters), 600 Nm³/hr at Jajpur commissioning this month (August), with plan to double to 1,200 Nm³/hr next year. CapEx ~₹35 crore at minimum 15% IRR.
Downstream Capacity Expansion: All CapEx on track — cold rolling capacity to rise from ~2 million tons to 2.67 million tons by FY28 across Jajpur, Hisar, and Kharagpur. HRAP (1.1 MTPA) ready around Q3 FY27 with gradual ramp to rated capacity. FY27 CapEx ~₹2,800 crore. Indonesia SMS provides slab/HR coil sourcing flexibility at lowest production cost without replacing Indian melting.
Decarbonization: Hisar achieved 12% YoY reduction in GHG emission intensity through energy-efficient ancillaries and waste heat recovery systems. Scrap feed at 85-90% (Hisar) and 70-75% (Jajpur) strengthens CBAM positioning; all international verifiers already accredited.
Regulatory Engagement: Active dialogue on anti-dumping (DGTR meeting held; public hearing scheduled September 9) and QCO (expect no reversal before March 2027 extension; pushing against further extension).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 sales volume growth | 8-10% | Maintained; management acknowledges Q1 shortfall and will provide revised numbers at Q2 if needed |
| H1 FY27 EBITDA per ton | ₹18,000-20,000 | Maintained; cost increases (gas) being passed through with lag; power/fuel down 40-50% from Q1 peak but still above pre-war levels |
| FY29 sales volume target | 3.5 MTPA | Long-term commitment; supported by Indonesia melt shop ramp-up and downstream expansions |
| Cold rolling capacity | 2.67 MTPA by FY28 | Across Jajpur, Hisar, Kharagpur; incremental commissioning quarterly over next year |
| Indonesia melt shop ramp-up | 70-80% utilization by FY27 end | Based on partner's operational track record; gradual sales penetration starting now |
| Maharashtra greenfield investment | Clarity in 1-2 quarters | Land acquisition in progress; management committed to announcing only with absolute clarity |
| HRAP commissioning | Q3 FY27 (1.1 MTPA) | On track; gradual ramp thereafter |
Risks & Constraints
| Risk | Context |
|---|---|
| Industrial gas supply disruptions | Q1 severely impacted by government-imposed LPG/propane restrictions, forcing open-market purchases at up to 3x normal prices; mitigated through PNG diversification at Jajpur (Plans for Hisar/Ghaziabad) and improved availability, but management notes prices still above pre-war levels and volatile |
| Cost pass-through lag | Substantial gas cost increases could not be fully passed on (~100% pass-through not achievable); margin impact partially offset by value-added mix; EBITDA per ton guidance maintained but contingent on continued normalization |
| QCO (Quality Control Order) extension risk | Currently extended to March 2027; management has argued against further extension, fearing Chinese substandard product influx; any further extension would weaken the level playing field for domestic quality-focused manufacturers |
| Anti-dumping determination uncertainty | DGTR process ongoing with public hearing September 9; outcome and timeline uncertain, though management notes "positive direction" and verifiers being appointed |
| CBAM and EU quota reduction | EU has reduced import quota, impacting export volumes to Europe (30-40% of exports); management confident of meeting entire quota with compliant, low-carbon product but European volumes will stay lower |
| Middle East geopolitical tensions | Logistics uncertainties in early Q1 created production/sales disruption; situation has improved but remains volatile |
Q&A Highlights
Volume Guidance & Exports
- Question: Confidence on sustaining 8-10% FY27 volume growth despite Q1 decline, and whether export surge is opportunistic or sustained (Amit Dixit, Goldman Sachs)
- Answer: H1 guidance maintained; revised numbers at Q2 if needed. Export share appears higher only due to lower domestic base — absolute volumes consistent QoQ. Export strategy driven by EBITDA maximization, will maintain current volume levels (Abhyuday Jindal)
Gas Costs & EBITDA Trajectory
- Question: Will Q1 power-and-fuel spike (10-10.5% of revenue) persist in Q2, and is ₹18,000-20,000 EBITDA/ton guidance intact? (Alok Deora, Motilal Oswal)
- Answer: Gas costs driven by forced shift to open-market LPG/propane at up to 3x prices; now down 40-50% from peak but still above pre-war levels. Cost pass-through works both ways with lag. EBITDA/ton guidance maintained; fresh numbers at Q2 (Tarun Khulbe, Abhyuday Jindal)
Q1 Impact Without Gas Crisis & Recovery Pace
- Question: What would volumes/margins have looked like without the gas shortage, and is recovery immediate or gradual? (Sumangal Nevatia, Kotak)
- Answer: Volumes would have met original guidance; not all gas cost increase could be passed (100% pass-through not achieved). Recovery will be gradual over next few quarters — "no magic wand" (Abhyuday Jindal)
CBAM Implementation & Europe Strategy
- Question: How is CBAM evolving and how does it shape the Europe geography? (Sumangal Nevatia, Kotak)
- Answer: JSL has all internationally accredited verifiers in place; awaiting EU to appoint its own verifiers. Scrap-heavy production (~85-90% Hisar, 70-75% Jajpur), top-tier sustainability scores. EU quota reduction is the binding constraint, not CBAM — management confident of meeting entire quota (Abhyuday Jindal)
New CapEx & Maharashtra Investment
- Question: When do new CapEx programs start given stronger balance sheet, and when will Maharashtra investment be clarified? (Pinakin Parekh, HSBC)
- Answer: FY27 CapEx of ~₹2,800 crore on track, focused on downstream cold rolling from 2 million to 2.67 million tons by FY28. Maharashtra land acquisition in progress — expect detailed plan in one to two quarters; management committed to announcing only with absolute clarity (Tarun Khulbe, Abhyuday Jindal)
Export Profitability & Indonesia Slab Strategy
- Question: Are new markets (Japan, Korea, Brazil) similarly profitable, and can export mix structurally increase? Also, will Indonesia slabs replace Indian EF production? (Satyadeep Jain, Ambit)
- Answer: Exports target only premium grades/geographies where margins are attractive — never compete on vanilla grades. Export share won't increase materially as domestic is priority; new market volume build-up will take multiple quarters. Indonesia slabs supplement, not replace, Indian melting; flexibility exists to bring slabs or HR coils depending on cost (Abhyuday Jindal, Tarun Khulbe)
Anti-Dumping & QCO Outlook
- Question: What is the latest on anti-dumping duty and QCO? (Ritesh Shah, Investec)
- Answer: DGTR meeting held — process moving in positive direction, public hearing scheduled September 9, verifiers being appointed. QCO extension to March 2027 unlikely to be reversed before then; management actively arguing against further extensions to prevent substandard Chinese material inflow (Abhyuday Jindal)
CBAM Carbon Intensity & Scrap Feed
- Question: Can you quantify carbon intensity for both plants and the scrap feed category (pre vs. post-consumer)? (Ritesh Shah, Investec)
- Answer: Detailed carbon intensity data to be shared offline by IR. Scrap feed: ~85-90% at Hisar, 70-75% at Jajpur — scrap maximization always the target. Pre/post-consumer category clarification to be followed up post-call (Abhyuday Jindal)
RKEF (Indonesia) Profitability
- Question: Given Indonesia's revised nickel ore benchmark, how did RKEF profitability trend and does prior guidance change? (Ritesh Shah, Investec)
- Answer: RKEF business is volatile given nickel price swings but remains strategic for raw material security — EBITDA has been positive for the last two quarters including Q1. No change to profitability expectations (Tarun Khulbe)
PT GMI Consolidation Change
- Question: PT GMI moved from JV to wholly owned subsidiary — what was the rationale, and how should we read the consolidation shift? (Ritesh Shah, Investec, second round)
- Answer: During construction, JSL held board control to ensure timely execution; with operations commenced, partners (better equipped to run) took control effective July 1, 2026 — now recorded as associate (share of profit/loss, no line-by-line consolidation). Contractual right to source slabs for India unchanged; no business plan change and no change to guidance (Kapil Arora, Tarun Khulbe)
Green Hydrogen Expansion
- Question: What is the total green hydrogen CapEx and payback? (Ritesh Shah, Investec, second round)
- Answer: CapEx ~₹35 crore at minimum 15% IRR. Hisar has 90 Nm³/hr installed (another 200 Nm³/hr in two quarters); Jajpur 600 Nm³/hr commissioning this month, doubling to 1,200 Nm³/hr next year. 100% of stainless steel used in these projects is Jindal Stainless material (Kapil Arora, Abhyuday Jindal)
Production Normalization
- Question: Has production returned to pre-war levels as of today? (Ritwik Sheth, One Up)
- Answer: Yes — production is back at pre-war levels; PNG at Jajpur improves fuel flexibility and reduces dependence on imported gases, providing resilience against future supply disruptions (Abhyuday Jindal)
Grade Mix Rationale
- Question: Was the elevated 300 series (47% vs. 49% in Q2 last year) a deliberate value-added strategy for cost pass-through? (Parthiv Jhonsa, Anand Rathi)
- Answer: Grade mix variation of 1-2% should not be over-read; Q1 saw deliberate focus on segments/grades with strong bottom-line contribution — 300 series carries highest nickel content aiding price pass-through (Tarun Khulbe, Abhyuday Jindal)
Scrap Sourcing Strategy
- Question: What percentage of scrap is purchased from Europe, and any bottleneck risk? (Ashish Kejriwal, Nuvama)
- Answer: Less than 2-3% of scrap comes from Europe; strategy is domestic + Southeast Asia sourcing covering 90-95% of requirements, insulating supply from European export restrictions (Abhyuday Jindal)
Capacity Utilization & Demand Recovery
- Question: Given normalized gas supply, can production be sold immediately, and what is current utilization? (Ashish Kejriwal, Nuvama)
- Answer: Whatever is produced will be sold — demand never an issue. Q1 ended at 69-70% utilization due to disruptions; will increase in Q2. Full-year volume guidance to be confirmed at Q2 (Abhyuday Jindal)
Indonesia Utilization & Peer Investments
- Question: What is the current utilization of the Indonesia plant, and what is planned by peers? (Tushar Chaudhari, Prabhudas Lilladher)
- Answer: Indonesia is "ramping up" — targeting 70-80% by FY27 end based on partner track record. SAIL's similar deal with Indonesia government and POSCO's investments validate JSL's early-mover strategy in securing nickel supply chains (Tarun Khulbe, Abhyuday Jindal)
Key Takeaway
Jindal Stainless delivered a resilient Q1 FY27 despite industrial gas shortages and Middle East logistics disruptions, with revenue, EBITDA, and PAT growing 10.5%, 1.4%, and 7.7% YoY respectively, though finished goods sales volumes fell 7.3% YoY on production constraints. Management maintained its H1 EBITDA per ton guidance of ₹18,000-20,000 and FY27 volume guidance of 8-10%, prioritizing value-added grades (300 series at 47% of mix) and export diversification into Japan, South Korea, and the Americas to protect margins. The balance sheet strengthened further with net debt at ₹2,950 crore and net debt-to-EBITDA at 0.53x, supporting ₹2,800 crore FY27 CapEx across downstream cold rolling expansions targeting 2.67 million tons by FY28, the 1.2 MTPA Indonesia melt shop ramp-up (now an associate as operations commenced), and green hydrogen capacity build-out across Hisar and Jajpur. Production has returned to pre-war levels with PNG diversification reducing future gas disruption risk, while power/fuel costs remain above pre-war levels but down 40-50% from Q1 peak. Key watch items include the September 9 anti-dumping public hearing, QCO extension risk beyond March 2027, sustained gas price normalization, and management's revised full-year volume guidance expected at Q2.