JSW Steel Ltd Q1 FY27 Earnings Analysis

- India’s GDP expected to grow close to 7%, with steel growth elasticity around 1.3x GDP. - Steel market growth guidance: 7% to 9% for the coming year. - JSW expects sales growth of 10% to 12%, excluding BPSL adjustments. - Production growth guidance around 13% for FY27. - JSW targets 62 million tonnes capacity in India by FY32, plus 16 million tonnes from joint ventures. - Capacity expansions planned to support growth at roughly 8%-10% CAGR over the next 3-4 years. - Joint Ventures (JV) will add about 10 million tonnes capacity by FY30; combined growth faster than industry average (1.5x). - Annual capex expected between Rs. 20,000 to Rs. 35,000 crores to support expansions. - JSW aims to grow faster than the Indian steel industry's 8% growth rate, maintaining volume growth around 12%.

- JSW Steel expects steel market growth in India of about 7-9%, with flat steel growth around 10-12% market sales growth for JSW (Page 20). - Company guided for sales growth ~10% (excluding BPSL), adjusted for BPSL implies ~12% growth for FY27 (Page 20). - Production growth guidance of ~13% for FY27, sales growth of 10% achieved in FY26; similar or better growth anticipated ahead (Pages 12, 20). - Incremental EBITDA expected from capacity expansions (Dolvi, Vijayanagar, Utkal) estimated between Rs.9,000 to Rs.12,000 crores beyond base estimates (Page 14). - Overseas operations in US and Italy expected to improve profitability in FY27 (Page 14). - Normalized PAT excluding exceptional items was ~Rs.8,700 crores in FY26; with upcoming expansions and operational improvements, earnings growth is expected. - Operational performance strong with deleveraged balance sheet provides foundation for growth (Page 20). - EPS expected to benefit from volume growth coupled with operational efficiencies and capacity expansions through FY27 and beyond.

- Total capex guidance is Rs.1,26,000 crores over the next 4-5 years, covering capacity expansion, downstream, and mining. - An additional Rs.1,00,000 crores is expected between now and FY33 for JV equity, mining, and further capacity expansion. - Annual capex run-rate is expected to rise to Rs.30,000 - Rs.35,000 crores in the coming years. - Key ongoing projects include BF-6 expansion at Vijayanagar (~Rs.26,000 crores) and Dolvi Phase 3 (expected CY27). - JV with JFE Steel and POSCO for expansions, including 10 million tonnes JV capacity with JFE and 6 million tonnes plant with POSCO in Odisha. - Focus on green steel: setting up a 4 million tonnes DRI and scrap-based facility at Salav. - Scrap processing facilities being added to enhance scrap use in steelmaking. - Expansion also includes long product increase via Kadapa and Raigarh structural mills and BMM Ispat acquisition with expansion plans.

- JSW Steel has undergone significant deleveraging with net debt reduced to ~Rs.54,000 crores as of March FY26. - The second tranche of equity investment from JFE Steel (about Rs.7,900 crores) is expected by end-June FY27, further driving deleveraging. - The company has revised its maximum gearing cap from 1.75x to 1.25x and leverage from 3.75x to 3.00x, targeting comfort below 2.5x leverage. - Capex plans of Rs.1,26,000 crores over 4-5 years include equity investments into joint ventures. - Equity investment requirements for joint ventures (e.g., BF-6 expansion) are estimated around Rs.8,000 to Rs.10,000 crores per project, with JSW’s share being Rs.4,000 to Rs.5,000 crores each. - Despite high capex (Rs.30,000-35,000 crores annually), future cash flows from incremental capacities are expected to fund a part, limiting need for substantial new debt. - Temporary increase in debt might occur during heavy capex periods but overall debt levels expected to be well managed.

The transcript from the JSW Steel Q4 FY26 Earnings Call does not provide explicit details on the current or expected order book or pending orders. However, related information includes: - Domestic steel demand is expected to grow by 7%-9% in FY27, indicating a healthy market for sales/orders. - JSW Steel expects consolidated steel production of 29.75 million tonnes and sales of 28.6 million tonnes in FY27. - Expansion plans include increasing capacity to 62 million tonnes by FY32, with multiple ongoing and upcoming projects. - The company is well-positioned to support domestic growth and export opportunities. - Price increases for steel products have been implemented recently, signaling demand stability. - Overseas operations and joint ventures (JV) in the US, Italy, and with JFE and POSCO aim to enhance future volume and profitability. No specific order book or pending order value was disclosed in the call excerpts.