With steel demand expected to remain resilient and expansion gathering pace, JSW Steel is focusing on deleveraging, raw material security, trade protection measures and green steel while advancing key projects Jayant Acharya, joint managing director and CEO, JSW Steel, tells Urvi Malvania. Excerpts.
Q1. What were the key drivers of margin expansion despite higher input costs?
A: Three factors supported the top line—volume growth, price tailwind and product mix. Finance costs also reduced after debt repayments last quarter and will decline further as we repay more debt. Steel prices started recovering from January, with the full impact seen in April–June. While there was some moderation in long products and, to a lesser extent, flats, the mix shifted towards flats and special steels, supporting margins.
Q2. You said anti-dumping investigations and safeguard duties can run in parallel. Given continued volatility around the Strait of Hormuz, do you believe both measures are necessary?
A: Anti-dumping and safeguard duties serve different purposes. Safeguard is uniform across countries, while anti-dumping targets specific countries and products. The anti-dumping investigation into hot-rolled coils follows a 126% YoY jump in imports last quarter. Surplus material, partly redirected because of geopolitical disruptions, has made India a vulnerable destination. Anti-dumping addresses product- and country-specific imports, and the DGTR investigation will determine the outcome.
Q3. With net debt declining, how will you prioritise capital allocation between expansion, deleveraging and shareholder returns?
A: Our net debt-to-EBITDA ratio is 1.46. Cash received on June 30 will be used to repay debt, reducing finance costs from about Rs 1,700 crore to below Rs 1,500 crore. Rating upgrades should also lower borrowing costs, with those gains used for further deleveraging. If margins remain sustainable, we expect to fund most capex through internal accruals while comfortably covering interest, dividend and tax.
Q4. Do you see demand growth holding in the 7–9% range, given the macro environment?
A: Demand growth in Q1 was 8.3%, and we expect around 8% for the full year. While Q2 is seasonally weak due to the monsoon, construction, manufacturing, festive demand and a stronger January–March quarter should support H2. Reconstruction demand in (export markets) after geopolitical conflicts ease, along with infrastructure and defence spending in Europe, should also improve global steel demand structurally.
Q5. How is Green Edge shaping up in export markets in terms of demand, premium realisation and future uptake?
A: We’ve introduced Green Edge in Europe and the US and have been able to command a premium. Europe’s carbon market, at around €80–90, will be the benchmark for carbon premiums. We’ll assess demand before taking a longer-term view, depending on customer industries and applications. Our Salav low-carbon steel project will form part of the next expansion phase through 2032.
Q6. You also mentioned the slurry pipeline bringing logistics efficiencies of about Rs 1,000 per tonne. When will these savings reflect?
A: The slurry pipeline is over two-thirds complete and is expected to be commissioned by March 2027. It should reduce iron ore costs by Rs 900–1,000 per tonne. The benefit will first accrue to the Paradeep plant and later reduce freight costs for iron ore concentrate and pellets supplied to Dolvi.
Q7. What is the update on the POSCO JV and the JSW-JFE facilities?
A: Land has been identified for the POSCO JV, and approvals are under way. The proposed expansion of the JSW-JFE joint venture to 10 million tonnes is also on the drawing board. Both projects are expected to move ahead in the next financial year, subject to approvals.
Q8. How will the remaining 12 mines be operationalised, and is the investment already factored into this year’s capex guidance?
A: The mines will be operationalised in phases. Three mines each in Goa and Karnataka are expected to start over the next 1–1.5 years. The remaining six mines in Andhra Pradesh and Maharashtra are at various stages of exploration and will be supported by beneficiation facilities. These mines will be value-accretive to existing plants, and mining investments are already included in the current capex guidance.
Q9. What other cost optimisation levers, including fuel security, are you pursuing amid continued macro volatility?
A: We are reducing fuel costs through multiple initiatives, including increasing captive coking coal from Mozambique, where equipment has already been ordered for CY28 operations. This will allow blending with domestic coking coal. We are also washing domestic coal to improve economics. In addition, a 12-million-tonne BHQ (Banded Hematite Quartzite) beneficiation plant will upgrade low-grade iron ore, improving raw material security and lowering costs.
Q10. Can you clarify whether the FY32 capacity target remains 80 MTPA or has been revised to 100 MTPA?
A: The roadmap remains unchanged. By 2032, JSW Steel targets 62 million tonnes of capacity, with another 16 million tonnes through Indian joint ventures and 1.5 million tonnes in Ohio, taking total capacity to around 80 million tonnes. Our focus remains on achieving this target over the next seven years.