Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
JSW Steel Ltd (NSE: JSWSTEEL) Q4 2026 Earnings Call dated May. 14, 2026
Corporate Participants:
Ashwin Bajaj — Group Head, Investor Relations
G.S. Rathore — Whole-time Director and Chief Operating Officer
Arun Maheshwari — Director, Commercial and Marketing
Swayam Saurabh — Chief Financial Officer
Analysts:
Rashi Chopra — Analyst
Rahul Gupta — Analyst
Presentation:
Operator
Ladies and gentlemen, good evening and welcome to JSW Steel Limited Q4FY26 earnings conference call. As a reminder, all participant lines will remain in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded with this. I now hand the conference over to Mr. Ashwin Bajaj group Head of Investor Relations.
Thank you. And over to you.
Ashwin Bajaj — Group Head, Investor Relations
Thank you, Operator. Very good evening ladies and gentlemen. Welcome to JSC’s earnings call for Q4 and financial year 2026. We have with us today the management team represented by Mr. Jayantacharya, joint MP and CEO, Mr. G.S. Ator, Chief Operating Officer, Mr. Arun Maheshwari, Director of Commercial and Marketing and Mr.
G.S. Rathore — Whole-time Director and Chief Operating Officer
Swayam Saurabh, the CFO. We’ll start with opening remarks by Mr. Acharya and then open the floor to Q and A. So with that, over to you, Mr. Acharya.
Ashwin Bajaj — Group Head, Investor Relations
Yeah. Thank you, Ashwin. Good evening everyone. So FY26 was a transformational year for JSW Steel. Marked by strategic joint ventures with global steel majors. Progress on steel making and downstream capacity expansions, enhanced raw material security and significant balance sheet deleveraging. In December 2025 we took a very important strategic step of advancing our long standing partnership with JFUS Steel of Japan. We announced a 50:50 joint venture with them for our BPSL steel business. The transaction has progressed as scheduled with the JV entity being formed by end of March.
And JFE has brought in the first tranche of their equity investment into the joint venture. This transaction entails a deleveraging of approximately 37,000 crores for JSW Steel out of which about 30,000 crores has been completed. At March end. JSW Steel’s balance sheet has transformed with operational improvements. Our leverage has fallen to 1.81 as on 31st March and net debt stands at 54,000 crores. Our credit rating outlook has seen an uplift and we expect to see continued progress on this front.
As you are aware, we had also been working on a joint venture with Posco South Korea last month. We have signed a joint venture agreement with Posco at the India South Korea Summit in New Delhi to set up a Greenfield Integrated steel plant of 6 million tons in Orissa. This transformation has set the foundation for our next phase of growth. India’s continued strong growth in steel demand and our strong balance sheet has enabled us to accelerate the growth plans. We have been targeting a capacity of 50 million tonnes as we have been communicating in India by FY31.
We are now announcing a target of 62 million tonnes by FY32 which can be achieved through our existing sites. In addition to this, the joint ventures of JFE and POSCO will have a cumulative capacity of 16 million tonnes by FY32. Taking the total capacity in India along with joint ventures to 78 million tonnes. Including our Ohio capacity of 1.5 million. The capacity would be close to 80 million tons for JSW Steel and the joint venture entities put together. Interestingly, if we just look at the ranking of Steel Productions, US at number three and Japan at number four as a country produce about 80 million tons.
So this capacity would bring us to be one of the largest steel producing companies worldwide. During the year we have announced an acquisition of BMM Ispat in Karnataka, a 0.9 million ton producer of long products which should complement our product basket of long products. BMM is located at close proximity of about 50 km from our Vijayanagar steel plant. It has land available with expansion potential of 0.9 million ton to be expanded to 1.8 million ton at low specific investment cost. The expansions would focus on engineering specialized steel and this acquisition is expected to be completed by end of this financial year.
Our expansions in 1 million ton in Kadappa and the first phase of 5 million tonne in GSW Utkal which we announced last year are progressing on track. We are announcing a further 5 million ton expansion at Vijayanagar which will take the Vijayanagar steel plant capacity to 25 million tonnes making it the world’s largest single location steel plant. Our growth strategy also focuses on value added products and during the year we have announced several downstream projects across our various sites in order to maintain our share of VASP over 50%.
We have also taken big strides to enhance our raw material security. We have completed the acquisition of MDR high grade coking coal mines in Mozambique. We have increased our effective interest in Ilawarra coking coal mine from 20 to 30%. On the iron ore side, we have operationalized one new mine in Goa and we have won one additional mine in Goa in the last few days. We had previously stated our target of achieving a 50% captive iron ore integration and 25% captive coking coal by FY31 at a 50 million steel capacity.
With the MDR acquisition, we now expect to be 50% captive for both coking coal and iron ore by FY31. We would also target going forward to enhance our captive to meet the 50% share at 62 million tons capacity as well. So thus the last year has truly been transformational. In slide 8 of our presentation you will see that over the next decade India will be the key steel market globally. China steel production and consumption as a share of global demand peaked out around 2020 and is expected to see a gradual decline.
Other markets will witness muted growth. India is going through a nation building phase with steel being a key building block for growth. This creates a long Runway for steel demand to outpace the real GDP growth in the country. India, as the second steel producer and consumer, will continue to increase its shareholders of global steel consumption from about 9% currently to 16% in a decade. We believe production growth is likely to lag consumption growth. JSW strength and capabilities including human capital, digitalization and AI gives us the confidence to grow steadily to meet this Indian opportunity.
At the same time, we will stay prudent and focused on creating shareholder value as we have done historically in the past. On the macroeconomic front, the global economic growth outlook remains resilient with IMF forecasting global growth in 2026 at 3.1% and the outlook for 2027 at 3.2%. This is despite the world economy facing elevated uncertainty driven by geopolitical events, particularly in the Middle east, which is causing supply disruptions, inflationary risks increasing the pressure on interest rates.
Imf, however, has flagged that prolonged continuation of this conflict could result in an impact on the gdp. Even as global uncertainties persist, India continues to grow to show strong growth momentum. The forecast By RBI for FY27 is 6.9% reflects the strength of domestic fundamentals. With Indian growth demand remaining robust, India has shown resilience in sustaining growth and geopolitical shocks. Such shocks are increasingly becoming the new normal. Economic activity in India has picked up in the second half of the year supported by GST led reforms.
Healthy rural indicators, strong credit growth, improving capacity utilization and traction across key sectors continue to support the outlook. At the same time, risks such as energy price volatility and monsoon related uncertainties needs to be monitored. India’s steel consumption also grew at a healthy rate of 7.9% in FY26 due to a large flow of imports. In the past two years we have been a net importer. With the imposition of safeguard duty last year, steel imports have declined and exports have risen, making India a net exporter after two years.
Looking ahead, domestic steel demand is expected to grow at a healthy rate of 7 to 9% in FY27, incrementally adding 12 to 14 million tons of demand. In China, steel Production was down 4.6% in Q1, outpacing the 4.2% decline in consumption. With production easing and export licensing norms coming into play from January beginning, steel exports including semis fell by 8.1%. Y o y Looking ahead, a better demand supply balance is expected as China steel demand is projected to contract at a slower pace than what we have seen in the previous year.
JSW Steel’s growth continues to be firmly India centric, reflecting our long term conviction in India’s growth trajectory. Steel is the building block for growth across manufacturing infrastructure, engineering, energy and mobility. A strong domestic ecosystem directly contributes to self reliance while also creating an opportunity to build further resilience and self reliance in the country. Our growth strategy continues to focus on disciplined capital allocation, efficient execution technology and digitalization to create sustainable value for all stakeholders.
On sustainability, we were included in the S and P Global Sustainability yearbook, earned the top 1% emblem globally across industries and were ranked number one in the global steel sector. We have commissioned 1 gigawatt of renewable capacity with a total 2.5 gigawatt approved by our board along with three hundred and twenty megawatt of battery storage. We also deployed India’s first electric locomotive for captive logistics at Vijayanagar. On the update of our projects. Just to give you a brief overview.
At Vijayanagar, the BF3 expansion from 3 to 4.5 million is currently under testing and commissioning. The ramp up is expected to add incremental volumes from Q2 onwards. At Dolby, the Phase 3 expansion from 10 to 15 million tonnes is moving ahead as planned with civil work equipment erection underway and targeted for completion by September 27. At JSW Utkal in Orissa, the two pellet plants will be commissioned by FY28. The first phase of 5 million steel capacity will be commissioned by FY30. The 30 million ton slurry pipeline in Orissa is progressing well and is expected to be commissioned by FY27.
The 1 million ton structural mill at Kadappa is progressing with equipment ordering underway and commission targeting by FY 29th. We are adding about 3 million tons of value added capacities while we grow our steel capacities across galvanized electrical steel, tin plate, cold rolling, structural products, etcetera and these projects are progressing well and will be commissioned between FY28 and 29. In addition, let me give you a little bit of an update on the raw material side on iron ore. We have 25 iron ore mines out of which 13 are currently operational.
We are working on operationalizing the remaining mines as well as increasing the EC capacity at some of the operating ones in Goa, we expect to operationalize two more mines in quarter one of FY28. By quarter one of FY28, as we increase our captive iron ore production, we are geographically optimizing our sourcing thus reducing our logistics, cost and lead times. The 2 million ton iron ore mine at Netrabanda which is now with the joint venture is now part of the is being commissioned in the quarter four increasing the iron ore availability for the joint venture.
On the coking coal front, as we mentioned earlier, Mozambique has the potential to yield 250 million tons of usable high quality coking coal. The mine will be developed in phases and the first phase is targeted to be completed by mid calendar year 2008 producing around 5 million tonnes of usable coking coal. In addition to the 30% stake in Ilawarra, we have three mines and coal linkages in India which together will provide around 5.5 million tons of coking coal. Along with MDR, we will have approximately 10 million tons of captive coking coal meeting around 50% of our total coking coal requirement by FY31.
Coming to our operating performance, quarter four was characterized by strong volume growth and operational performance supported by efficient asset utilization and increased plant reliability due to digitalization efforts across our sites. This was reflected in the higher capacity utilization for the Indian operations which stood at 96% excluding the BFC shutdown. The downstream capacity utilization also increased in quarter four to 95%. That provided us higher VASP volumes. Steel sales trooped at around 8 million tonnes for quarter four and around 30 million tonnes for FY26 driven by improved domestic sales.
Supported by growing steel demand in India, our geographic and sectoral mix has improved. Automotive, packaging, alloy, engineering sectors have increased. Also, branded sales constituted about 50% of our total retail sales. Enhancing the overall value of the volumes during the quarter, we reduced inventory by 700,000 tonnes and approximately 100,000 tonnes. Over the full year we achieved 99% of our production guidance and 102% of our sales volume guidance for the year. Coming to the financial results, our Consolidated revenues in Quarter 4 crossed 51,100 crores, crossing 50,000 crores for the first time Adjusted EBITDA stood at 9,713 crores with an EBITDA margin of 19% while PAT stood at 19,243 crores.
It is important to note that there was an exceptional gain of 17,888 crores in quarter four. This includes a gain of 18,051 crores on slump sale of BPSL steel undertaking and 163 crores exceptional charge on implementation of new labor code. The normalized PAT excluding exceptionals for the quarter was 3,475 crores. In FY26 the adjusted EBITDA stood at 32,048 crores and the normalized PAT excluding exceptionals was 8,700 crores. We transited from quarter three with one of the lowest steel prices which has improved gradually post the imposition of safeguard duty and strengthened through March.
Some part of this price recovery will be realized in quarter one. FY27 on the cost side we were impacted by higher coking coal prices which increased by about $16 per ton. Iron ore costs were flattish during the quarter with 1/3 of captive iron ore usage in the quarter FY26. At our overseas operation Q4 performance was better at the Platen Pipe mill in Texas. However, the Ohio operations production was impacted as activities ramped up in January 26 following the caster upgrades and extreme cold weather.
Overall for FY26 the performance of US operations improved significantly reporting an EBITDA positive of $36 million compared to an EBITDA loss of $35 million in the previous year. The Italian operations also performed well in FY26 reporting an EBITDA of 16.4 million euros versus close to 15 million euros in the previous year. The BPSL transaction has driven a structural deleveraging and transformed our balance sheet. Our net debt has declined and stood at 54,000 crores by the year end. Our revenue acceptances stood at $2.1 billion.
Leverage and gearing have dropped substantially to 1.81 and 0.51 respectively. The second branch of equity investment in JFE is expected by end June which will drive further deleveraging of 7900 crores approximately. We have also revised our stated maximum cap for gearing from 1.75 to 1.25 and leverage from 3.75 to 3. However, our comfort level will be to keep the leverage below 2.5 during the quarter we incurred capex of 4,612 crores and 15,600 crores for FY26. The capex for our approved growth plan is 126,000 crores which will be spent over the next four to five years.
We expect to spend about 22,000 to 24,000 crores in FY27. The JSW online platform, in which we have about 61% equity stake on a fully diluted basis, continued to see strong momentum in the year. In quarter four it turned profitable for the first time. The steel volumes grew by 50% YoY and the GMV reached 6200 crores, a 57% YoY increase over 2000 crores of this GMV was driven by JSW1’s credit offerings. Looking ahead, we expect our coking coal cost to be higher by 12 to $15 in quarter one. And for FY27 we expect consolidated steel production at 29.75 million tonnes and a sale of 28.6 million tonnes.
This includes volumes from BMMS path which is being acquired by us but excludes volume from our JFE joint venture. We expect the domestic steel demand to grow in the range of 7 to 9% in FY27 and JSW Steel is well positioned to support this growth. We’ll be happy to take questions. Thank you.
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question and to restrict to two questions at a time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take our first question from the line of Bibo Zutshi from JP Morgan.
Please go ahead.
G.S. Rathore — Whole-time Director and Chief Operating Officer
Yes, hi. Thanks for the opportunity and congratulations on the strong results. The first question is basically on the raw material security. Given the target of 78 billion tonnes starting with iron ore, maybe. While you said the captive mix would be 50%, we have seen some of the global iron ore majors ramping up iron ore exports to JW Steel. So how confident are we ramping up captive mix from 1/3 correctly to 50%? And how could be the mix for imports versus domestic sourcing? Just provide some guidance on that please.
Arun Maheshwari — Director, Commercial and Marketing
Hi,
G.S. Rathore — Whole-time Director and Chief Operating Officer
I’ll answer that. I’m Arun Meishwari. Regarding the security of iron ore up to 50% from the captive sources. Today also we have a 50% EC capacity available for the iron ore within India for our own consumption. Depending upon the logistics ratios, depending upon the proximity, depending upon the other sources available at that particular point of time, we define to use how much we should be taking out from the captive. So that’s how we decided to take only up to one third of the consumption last year from our captive sources Even though the ECs were available up to 50% of our own consumption.
So this is how we try to maximize our logistical advantages at different geographies. Because we are located in almost one geography of India going forward also we have continued to participate in the assets of iron ore within India. Recently we have quite some more in Goa. We continue to look for something more in South. We are participating in Andhra Pradesh wherein we have secured some concessions. Those are exploration licenses wherein we are doing more exploration. So Today we have 13 operational mines and about 12 is under exploration.
So we will continue to upgrade, keep on upgrading our captive sources available. And we are confident that at the 62 million ton of JSW volume we will have targeted volumes of capital sourcing.
Questions and Answers:
Ashwin Bajaj
The total number of mines as we mentioned was 25 with total combined resources of about 1.7 billion tons without the mines which are under exploration right now. So those will add to the resources.
G.S. Rathore
Okay? Okay, got it. That’s helpful. And the second question is on the Middle east concept. So we have that there is a reduction in commercial LPG supplies and some shortages in natural gas as well. So do you see any risk to the volume guidance if the conflict continues or those issues are largely resolved in the guidance that you provided?
Arun Maheshwari
Well, yes, LPG and the gas supplies LNG
G.S. Rathore
Has been recently cause of concern because of the Middle east disruption. But our exposure to the gas linked production is very very limited in the overall production. However, it does have an impact on the cost of production. However, we have ensured and we continue to ensure that there won’t be any production disruption by virtue of non availability of gas unless it becomes too severe in coming months. Otherwise our portion to the gas linked to steel production is very, very less.
Rashi Chopra
Okay, thank you Lord. Very happy.
G.S. Rathore
Thank you.
Operator
Thank you. We’ll take our next question from the line of Amit Dixit from Goldman Sachs. Please go ahead.
G.S. Rathore
Yeah. Hi. Good evening sir and congratulations for a good performance. A couple of questions from my side. The first one is on realization. Now given that realizations have gone up and spot realizations have gone up much higher in last quarter, what kind of realization increase do we expect do we expect going for? I mean in Q1, if you consider that, you know, the prices are rebate at the current level, I mean considering the contracts that you might have and other things.
Ashwin Bajaj
So yeah, Amit, you’re right. The increases have happened between January to March. Gradually part of the increase is reflected in our quarter four numbers and the balance increase will be reflected in quarter one. In the quarter four, our NSR has moved up by about 3,800 rupees per tonne and we would see the balance of the price increase play out in quarter one.
G.S. Rathore
Is it possible to quantify the balance?
Ashwin Bajaj
So difficult to give a number because it will depend on against the product mix and it will also take into account a seasonal number. But I think we expect that after covering the cost because the cost also will go up. My senses or our senses are the cost will go up in the range of 3,000 rupees or so per tonne but the margins will still be positive after covering the cost. So the price will cover the cost and add to the margin.
G.S. Rathore
Great, sir. Understood. The second one is essentially on the expansions that we have announced. Now most of our expansions are flat, focused and you know the country. Traditionally we have seen long demand outpacing flats. So any thoughts around long expansion as well? I know you mentioned one of the acquisitions that you have, but apart from that, are we planning to get active in longs as far as downstream expansion is concerned?
Ashwin Bajaj
So in the last announcements, if you recall, we have announced that the Karappa section mill, which is a structural mill which would go for beams and the expansion at our rigor facility which would have beam and rails. So those will be in long products in, in the BMM facility which we have just approved at the board for acquisition, which is a 1 million ton long facility would be expanded toward 1.8 million ton and that would also be in special engineering steel products. So yeah, these would add to the long product capacities which we currently have.
We believe that India with the infrastructure growth would require long products and these would help in meeting those demands.
G.S. Rathore
Okay, fair enough. All right, thank you sir.
Operator
Thank you. Next question is from the line of Amit Murarka from Access Capital. Please go ahead.
Arun Maheshwari
Yeah, good evening and thanks for the opportunity. So just wanted to understand the thought on growth going ahead. Like earlier in the past we’ve seen that usually you would have taken one project at a time. So given that now you’re indicating taking a multiple projects. So is it now the new normal like or should we like look at the business now as three balance sheet like one standalone, one JFE JV and one Costco JV for all your growth programs going ahead
Ashwin Bajaj
From JSW Steel’s perspective, if you See the slide which we have already given to you that by FY30 JSW Steel alone will be at 49 million tonnes approximately. Can I see that slide please? 49 million tonnes. And on top of that we would have the joint venture of JSWJ FE and including Ohio will be close to 55 million tonnes by FY30. The expansion of JSW Steel alone up to FY32 would be to 62 million. So what you would track for JSW Steel will be the 62 million tonnes. On top of this we have 10 million tonnes as we expect from the joint venture with JFE in the existing site and a 6 million tonne new facility at Posco.
Those would be tracked again separately.
G.S. Rathore
Dolby gets completed using two sites. Yeah,
Ashwin Bajaj
Yeah. And Mr. Ratoor is just adding that stat.
G.S. Rathore
Yeah. So like the Dolby will get over in another one year or so then we will start this year we’ll start Paradeep and Vijayanagar. So we’ll have two sites in Cedar, one side each 5 million. So
Arun Maheshwari
Yeah,
G.S. Rathore
That is the target we are taking.
Arun Maheshwari
My question is more longer term. So what I was trying to understand is like usually in the past you have taken one project at a time and then moved ahead. So is this now a new normal that you will be taking up multiple projects through the JV structure that is in place now?
Ashwin Bajaj
Yeah. So as we had given it given you an indication earlier that the idea of the JV was to strategically grow faster in the country while it helped us to deleverage as well. So we’ll have a double engine of growth, one which JSW Steel will grow on and the other which the joint venture will grow on. We have also, we have given you an indication that India is the fastest growing market and this is the right time to be able to take this opportunity and grow faster. That’s the idea. And we would therefore your answer is yes, we would be expanding faster along with the joint ventures.
Arun Maheshwari
Right. And given that the pace of growth is going to be so high, is there a plan to also kind of export larger part of these volumes than what we are doing currently then?
Ashwin Bajaj
Can you just repeat that once? Sorry.
Arun Maheshwari
Given that the pace of growth at a JSW including JV level is going to be quite accelerated with like multiple capacities being done. So is there also plan to essentially raise exports to a much higher percentage than what it is today in the current portfolio?
Ashwin Bajaj
We don’t, you know, we don’t see the need as of now the way you know it is structured. I think you will see probably more of domestic alignment. It’s possible that when the capacities incrementally maybe come up in the first one year or two years, you have a slightly higher export but then come down. Having said that, but I would like to say that our Paradeep facility which is on the port, would be the natural place to export from. So the exports from Paradeep will naturally be higher than other sites.
But given the domestic growth, as we have reiterated earlier, our feeling is that this capacity will be required to meet the domestic growth which we are seeing today. If you’re looking at a number of 230 million tons by the end of this decade and going beyond thereafter, unless capacities are put in place, I think India will not be able to meet this demand. I also mentioned a line. I think we believe that capacities are going to follow demand and there will be a lag in the medium term up to 2030.
Any capacity which you set up today takes four to five years minimum. So when you start a project, keep that in mind. But we are quite confident that with our faster pace of execution and low specific investment cost, we are well placed to grow in India. And we are quite optimistic that this is in line with the growth and not in excess of the growth.
Arun Maheshwari
Last data question, I request
Operator
You to join by the queue please as we have participants waiting for their turn. Thank you. Next question is from the line of Sumandal Nivatia from Kotak Securities. Please go ahead.
G.S. Rathore
Yeah, good evening and thanks for the opportunity. My first question is with respect to a JV with Posco. Just want to understand better what is the rationale and what value does the new JV partner brings? Given that we already have a very strong balance sheet after the JFE deal and we also have a lot of expertise, access to expertise in value added products, etc.
Swayam Saurabh
Given association with JFE. So just some color on this. Thanks.
Ashwin Bajaj
So there are two reasons. One is that you know, both JFE and Posco are leading global steel companies and both have their strengths on technology. There are certain strengths which JFE we have been able to get along with JFE into India, CRGO being one of them. And we have collaborated with them on many areas of improvements and will continue to do so. Posco also has their own areas of technology and especially in the high strength steels, giga steels which would go for lightweighting, replacement of aluminum, hydrogen technology to reduce emissions, digitalization and AI.
I think those are areas of cooperation between Posco and us. In addition to that, Posco has a 2 million ton cold rolling facility in Maharashtra. And they would like to integrate backwards with a steel plant. And one of their criteria for looking for a steel plant in India has been to have a backward integration of the steel from their own facility. So these are the two reasons.
G.S. Rathore
Localization, sourcing. And that is one of the primary reason even Fosco wanted to come to India.
Ashwin Bajaj
Yeah. So going forward they want to buy, rather than sending it from Korea, they want to buy more steel from the local facility in India.
G.S. Rathore
Understood. And just to have on this topic a bit more one is, I mean, how does our existing JV partners view association with new global players? Is there a potential conflict in future? And I mean, few years down the line, we have three large plants applying flat steel from Odisha. So will we have a different sales strategy, different targeted downstream products across the plants or they will just compete like independent plans?
Ashwin Bajaj
We do not foresee any conflict between the JV partners per se. They will have their own strategies for sure because they will be different legal entities. But we see, as we mentioned, the growth of India is strong and therefore will enable all the entities to grow. And Posco Maharashtra, as I mentioned, is a 2 million tonne, basically captive demand for the Posco facility which will come up. So keep that in mind as well. So that will be supplying basically one third of their total new capacity to the downstream facility.
G.S. Rathore
Got it. My second question is. Okay, can I go for a second question?
Operator
Yeah, please, go ahead.
G.S. Rathore
Yeah. So just, I mean on a broader level, just want to understand, given the overall macro issues in the country and the pressure on inflation, do we see any risk of some withdrawal of protection given our domestic prices are enjoying 20% kind of higher prices due to the protection. Just some thoughts here, sir.
Ashwin Bajaj
I think we, if you really look at protection, I would say India is probably one of the more balanced countries with respect to protection. As you see it, worldwide today we are seeing protections between 25 to 50% in various parts of the world. Every country is trying to safeguard their shores from any kind of trade flows which can be adverse for that country. And that is becoming very critical to the supply chain resilience of that country. In India, with 11.5% safeguard duty, I think we are far lower than what the rest of the world is.
That’s number one. Number two, your comparison is with the lows of December. I would not do that. Three years back in April 23, we had the same price as we had in April 26. The cost environment was similar if you were to look at coal and iron ore. But on top of that the depreciation of the rupee has been severe. So please look at the fact that your cost on account of the overall ecosystem has gone up. You have just come back to where you were three years back. I would say this more of a price correction and to make it a viable price system today.
From international price perspective also I think we are now well balanced. We do not think that we are very much off the international prices as we see today. If you look at by and large the western economies if you were to look at Europe and Europe is already in the range of 830 odd dollars of hot rolled coil and I think US is close to $1,100 per metric ton of hot oil goods. And Japan also and Korea also internal prices are higher. So we are price point of view also more balanced in India.
G.S. Rathore
Got it. That’s very useful. Thanks and all the best.
Operator
Next question is from the line of Pinakin from hsbc. Please go ahead.
G.S. Rathore
Thank you very much sir. My first question is if you look at the capex guidance of 1,26,000 crores over the next four to five years that clearly does not capture the entire 30 million ton JSW Steel expansion and the 10.5 million ton at the JV. So if you take a step back can you give us a broad range of the CapEx over the next 56 years to go from the current capacity base to 78.5 million ton capacity base and includes downstream mining everything.
Ashwin Bajaj
So currently as we have given you the capacity expansion plans our capex plans are at 126,000 crores as of now incrementally to be at 62 million plus invest for equity for the joint venture and our mining other investments downstream facilities. Our sense is that we would require another hundred thousand crores between now to FY33 because FY32 if you try to plan a capacity the payment would spill over at least to the next year. So you have about 6 to 7 years. 7 years in which you would spread this capex.
G.S. Rathore
Just to understand clearly this 126 plus another 1 lakh crore so 2,26,000 crores over the next. Let’s assume 6 to 7 years. Right? FY27 is at 22,000 crore. So the way we should look at it that in the coming years the annual run rate of the capex will go from the 20s to the 35,000 crore a year in the next couple of years as the project the multiple projects pick up pace.
Ashwin Bajaj
Yes, this is including the joint venture projects including the mining which we would, you know, additions which we would do in Mozambique, including our own 62 million tonnes. It’s a combination of all of them. Yes,
G.S. Rathore
Got it. And so my second question is, if I look at the guidance, right, if I strip away BPSM from this year’s base, it implies roughly 9, 9 and a half percent of production growth in FY27. Given the timelines of the project commissioning that we have in terms of Dolby Vijayanagar, is it fair to say that this is the broad 8 to 10% CAGR that we can look at for the next three to four years?
Ashwin Bajaj
I think if you see the guidance which we have given, if I recall, we have given a guidance of 29.75 million tonnes which on a like to like basis is a 13% growth in production. And guidance of sales at 28.6 million tonnes is a 10% growth. Now going forward, the capacities, as you know, we are getting in capacities of Vijayanagar and Dolby put together, which would add about 7 million tonnes of capacity between now to September 27. The Utkal facilities which have been taken up and the Vijayanagar facilities for expansion of another 10 million tons etcetera, which has been taken up would be there by FY30.
Those will provide, each of them will provide incremental Ebitdas for the next phase of growth.
G.S. Rathore
Got it? Got it. This is very helpful. Thank you very much.
Operator
Thank you. Next question is from the line of Pallav Agarwal from Antique. Stop Broking. Please go ahead. Hello, your line is unmuted. Please go ahead with your question.
G.S. Rathore
Yeah, good evening, sir. Am I audible now?
Ashwin Bajaj
Yes.
G.S. Rathore
Yeah, so first question was on BNS part. So, you know, I think can you share what was the actual production and ebitda number in FY25 for this company?
Ashwin Bajaj
I think we’ll request our investors, you know, you can reach out to them and take the details. I don’t have it off the. Off the top right now.
G.S. Rathore
Sure. Because you know, I think
Ashwin Bajaj
It’s a facility of 0.9 million ton. Just to give you an overview. So 0.9 million ton. So you can roughly producing in the range of, I would say we would produce in the range of 0.8 million tonight in this financial year.
G.S. Rathore
Sure, sir. And also, you know, if I look at the network, you know, I think probably about 2,700 crores as per the press release on the stock exchange. So. And we require it for about six and a half thousand crores. So that’s close to almost three times, you know, on A price to basis. So is this factoring in the future expansion that can happen.
Ashwin Bajaj
So the current price at which this is acquired represents
G.S. Rathore
Multiple approaches, discounted cash flow as well as the tapering cost. It’s roughly a million ton plant. Also the fact that it has a blast furnace which is very new which was commissioned only last year. And if you take a normative EBITDA per ton of plant of this size, you will realize that the effective EBITDA is significantly attractive. Plus the fact that this has potential to expand capacity almost double from here in fairly short period of time. All of these factors but the valuation we believe is fairly attractive.
Plus the synergy with our regional location
Ashwin Bajaj
On an expanded basis. You’re right that this gives us the additional headroom because we feel the next 1 million or 0.9 million ton can be expanded between 1600-1800 crores, making the overall investment very attractive.
G.S. Rathore
Thank you. I request you to join
Operator
Back the queue please. Thank you. Next question is from the line of Parthyu Jones from Anandra team. Please go ahead.
G.S. Rathore
Thank you for the opportunity and congratulations on completing the JV and further strengthening the relationship with the partners. I have two questions. The first question is pertaining to the steel prices. Considering, you know, just couple of days back or very recently, you know, a couple of companies from Vietnam, China have taken substantial price hike. And also, you know, your price in Europe and USA are at a reasonably high level. Just wanted to check if you can just give a number of what can we expect as far as your price increase in quarter one and say H1 going forward.
Ashwin Bajaj
So in the month of April we have increased prices and we have increased some price for flat products in the month of May as well. I think we increased 2,000 in April and 1,000 in May for flat. Our belief is that for now the price will be range bound. We will watch the geopolitical situation in the country and then take a view. As of now we believe this would be range bound going into this quarter.
G.S. Rathore
And so just continuing to that question. Any contracts from auto which would be done at a much higher prices because I believe it’s at a rolling basis, right?
Ashwin Bajaj
Yeah, it would. So auto gets recalibrated quarterly. So the price increase for automotive will come in this quarter. The quarterly prices will get really recalibrated. Those will be also in this quarter. You’re right.
G.S. Rathore
Okay. And any idea on the hike which we can expect from the. From the price from the auto sector?
Ashwin Bajaj
I will not be able to give you numbers here. But you know, as we close the things it will come out in terms of.
G.S. Rathore
Yeah. My second question is pertaining to the your analyzed CapEx run rate of about 30, 35,000 odd crores going forward, right. I believe though you are very comfortable for say 27 considering you’d be your production and sales are at about 10, 13% higher on a like to like basis and also the prices are good. However going forward at 35,000 crores of capacity analyze business would you start you know opting for more debt because for in the near term I think the cash flows might not match. If I’m not mistaken this is swayam here.
If you factor in the capacity, incremental capacity which are going to be available fully from now till next one and a half years and that includes JVML which is not at full capacity yet in FY26 can do 1 million more bf3 which is going to start production once the capacity of radiation is completed that will be 2 million more and only phase 3 which we expect to come in FY27, FY CY27 now these three put together creates almost 8 million tons of extra production which will create anywhere between 9 to 12,000 crore of EBITDA which is not in my base today.
So if you take that out you’ll realize that even if as a company we stretch to 30 to 35,000 crore of capex spend a part of it is going to get funded with the new cash I will generate. So if you exclude that you will realize that it’s from the base the kind of cash we are creating we are not going to create very large stress to increase debt but of course temporarily debt could still go up but given where we stand right now which is at 1.8 EBITDA and our expectation is this leverage in FY27
Ashwin Bajaj
Perhaps will go slightly better especially after second tranche of JP we think we’ll be very comfortable.
G.S. Rathore
So my basic, my understanding was for.
Rahul Gupta
Yeah,
Operator
Yeah, go ahead.
G.S. Rathore
Yeah yeah. My quick understanding was that is expected in CY27 so the incremental benefit would be only from 29 onwards. Right. So I think for 28 and 29 that is what my understand what I wanted to understand these two years there would be some increase in debt, right? If I’m not mistaken?
Ashwin Bajaj
No, not really because you know you will have
G.S. Rathore
JVML
Ashwin Bajaj
Which will start which will actually produce entire 5
G.S. Rathore
Million in FY27. Then you will have BF3 which will have some positive uptick in FY27 not fully that would come in FY28 and in FY28 you will also see Dolby’s part volume could be small. So this combined will create incremental cash which you are not seeing in our base yet without
Ashwin Bajaj
Dolby. Just to sum up is for 4 million tonnes at least you will see between now to FY27 including the BMM volume. That will give you additional cash flow till Dolby comes in. Dolby will start kicking in. Let’s say after, let’s say October 27th to December 27th quarter they will start let’s say operations and then ramp up capacity.
Operator
Thank you. We’ll take our next question from the line of Shubong Jain from Mepon India Mutual fund. Please go ahead.
Swayam Saurabh
Yeah. Hi sir. Good evening. Congratulations for the good performance. My first question is can you help us understand the current raw material consumption norms in the Indian operations like specifically for iron ore and cooking coal for per ton of steel and also within your cost of goods sold, roughly what percentage is attributable to iron ore cooking coal?
G.S. Rathore
Well, a strategy, utilization or the ratio of utilization of iron ore and cooking coal is purely depending upon what grade of iron ore we are using and which location and which technology we are using it to. So typically if I have to say then it is about 1.8 to 1.9 per ton of steel is what the iron ore convention would be. And cooking coal, if I do consider purely cooking coal, this is about 0.7 ML 700 kgs per ton of steel. It is typical ratio what we have only cooking coal and if you have to add all the coals it becomes about 900950 kgs depending upon the process what we are getting into.
Swayam Saurabh
Okay, and roughly what percentage is attributable to iron ore and coking coal in Cox?
G.S. Rathore
Well, it keeps changing or depending on because both are cyclical in nature. But then I would say only about 60% or 60% put together is the cost of cost share of iron ore and cotton coat.
Swayam Saurabh
Okay, sir. And I have one question. Ma’, am, I request
Operator
You to join back the queue please as we are participants waiting for the term. Thank you. Next question is from the line of Indrajit Agarwal from clsa. Please go ahead.
G.S. Rathore
Hi, thank you for the opportunity. I have my first question is on the export. As you said that more and more global economies are getting closed. So if at a point in the next couple of years we have a temporary overcapacity in flat steel in India, which geographies do you think we can still have a market?
Ashwin Bajaj
Actually if I really we have. We have modeled the overall flat demand in India. By and large, if you see flat has been growing at a slightly faster pace in general over the past few years. So we see that flood demand will increase the entry barriers for flood capacity. Setting up is more. Therefore in the medium term, maybe between the years of 28 to 30, I see that supply will lag demand going forward. If you really look at the overall thumb rule number, if we are incrementally generating about 12 to 14 million tons of incremental demand, roughly about 6 to 7 million tons of flat steel would be the incremental demand.
That means you will require to set up at least two hot strip mills because each hot strip mill takes almost two years to fully play out. So at least two hot strip mills should come every year for you to be able to meet that demand. I do not foresee too much of a problem in the planning which we see. There could be some year, as you mentioned, where if there is any clubbing of capacities which come, then certain amount would be exported, which is fine. As I mentioned, our Orissa facility is on the port and that can leverage exports into the world.
We also have opportunities of supplying some green steel to the world. As you know, we have said that Salao would produce low grade emission steel from natural gas and DRI and renewable energy. That is a natural export model. The third one is that we see that there is a gap in slabs also which is required internationally. The traded slabs internationally has come down post the Russia, Ukraine and Iran conflicts. There is a space which has been created in that. That’s the third opportunity for exports which is there.
G.S. Rathore
Sure. My second question is actually a bookkeeping question. If you can highlight how much is the iron ore cost increase for 1Q and what is the tax incidence of the BPSL deal?
Ashwin Bajaj
The iron ore. The iron ore cost have gone up in the last few weeks. That there will be a. We are trying to reduce and we are trying to do the blending in a manner so that the specific consumption is better. And with that we will try to moderate the impact of the price increase. It will be slightly higher, but not much from quarter four to quarter one. As far as the bookkeeping question is concerned, on the BPSL tax, something which you asked. You wanted to. Can you repeat that part?
G.S. Rathore
No. So BPSL has had carry forward losses, uninsolved depreciation. So the effective debts on this transaction is significantly lower. Those losses were fully utilized even on JSW books.
Ashwin Bajaj
Correct,
G.S. Rathore
On JSW books. All right. Thank you. That’s awesome.
Operator
Thank You. Thank you. We’ll move on to our next question from the line of Ashish Jain from Macquarie India. Please go ahead.
G.S. Rathore
Hi sir, good evening. So my first question is on pricing. You made a point earlier that current prices are still where we were in 2023. But then if I see that in context of China exports, assuming the China exports drive prices, they were much lower than 2023. So how do you think about pricing going ahead? Have we come to a point where pricing is more local irrespective of the safeguard duty? Have you come to that point yet?
Ashwin Bajaj
No, I don’t think price will always be what is internationally available and that has to be taken into account. I don’t think you can ignore that. But just to give you a number because we were just going into this as an analysis from our side. China prices, you know, in the international market in let’s say April May was in the range of 550, $560 fob. It was actually slightly higher than what it is today. Today it’s let’s say in the range of $510 fob. And on the cost side also you will see similar structures.
India at that point of time, hot oil coil prices were in the range of 60,000 rupees. You can do your maths. I think we are not very far from this basket. That’s why I compared April 23rd to April 26th. But international prices will always be a guiding factor for the domestic steel prices.
G.S. Rathore
Right?
Swayam Saurabh
Right.
G.S. Rathore
So secondly, in terms of the demand, is it possible to give some color in terms of which are the key sector segments where we are most optimistic on demand, if you can give some granular color on that.
Ashwin Bajaj
So you know the way infrastructure and construction naturally contributes to a very large part of the overall steel consumption and that’s growing at a very healthy rate. Automotive, if you see from what was expected when we began this year to what we ended this year, automotive growth has been really good. Automotive capacity announcements by major auto producers in the country is also a very healthy number. You know, we are seeing similar kind of traction in the renewable energy sector and similarly in, you know, appliances and others.
So I would, if you were to sum up infrastructure, manufacturing, including automotive, renewable energy, these are moving at a fast pace.
G.S. Rathore
Ashish, I request you to
Operator
Join back the queue please as we have participants waiting for their time. Thank you. Next question is from the line of Rashi from Suri. Please go ahead.
Rashi Chopra
The question was mentioned that the cost increase sequentially is expected to be about 3000 rupees. Apart from coking coal where all are you expecting increase
Ashwin Bajaj
Coking coal Our expectation is between 12 to 15 dollars.
G.S. Rathore
So the large part of the increase would be somewhere around the exchange rate is for sure one of the cost element. And the sea freight has gone because there’s a large part is seaborne trade also for us whether it’s the import of coking coal or other coal or coastal movement so that impacts and the fluxes. Because the Middle east is one region where all the fluxes are coming so that gets impacted and the damage incidences are increasing. Gas would be very. Our exposure to gas is just about 5 to 6% of the total production volume.
So it won’t impact much to us. But still in the civilian generally get impacted because of the gas prices.
Ashwin Bajaj
And on account of iron ore maybe we factor 5% quarter four to quarter one on cost.
Rashi Chopra
And when you say the exposure to gas is 5 to 6% my understanding was that the gas impacted mostly your downstream production. Is there any upstream exposure as well?
Ashwin Bajaj
Don’t be our. We are talking about natural gas exposure, right? Natural gas exposure when you naturally gas exposure to downstream is not there. Natural gas is basically used in Dolby in our operations to some extent. But as Arun explained it’s a very small percentage of our overall requirement. Downstream uses a little bit of LPG but we have been converting to different fuels and therefore. Yeah, and therefore we are able to mitigate some part of the impact of the LPG pricing.
Rashi Chopra
Thank
Operator
You. We are using
Ashwin Bajaj
Liquefied natural gas.
Operator
Thank you. Next question is from the line of Ritvik Sheth from Wallab Financial. Please go ahead.
G.S. Rathore
Hi, good evening sir. So a couple of questions. So what will be the share of our JV investments in this 2.5 lakh crore
Ashwin Bajaj
For the JV investment? Yeah. First of all the. As I said, 126,000 crores plus at the most another 100,000 crores. It could be a little lower but at the most another 100,000 crores. The JV investment will only be in form of equity. And so if you typically take a project which we are doing, let’s say we are doing bf6 for example right now in Vijayanagar for which the expansion which we have just announced 26,000 crores, if you were to take that as a benchmark between 25 to 30,000 crores equity would be for any project of this would be about 8 to 10,000 crores.
So in a project like this our share of the equity would be close to 4 to 5,000 in each of these projects. That means two projects multiplied by two.
G.S. Rathore
And so what is the outlook for the overseas subsidies for FY27?
Ashwin Bajaj
FY27 US operations have, you know, the vacuum degassing modification and our caster modification for dynamic soft reduction has taken place. They are in the process of stabilizing that will enable them to produce higher grades. So one that is value accretive. The volume also which we lost on account of the shutdown at Ohio operation that will come back. Baytown upgradation is getting completed and that should start operations in quarter two of this financial year. By the end of quarter two of this financial year and gradually ramp up so that these two combined will give you a better profitability going forward in the US Operation.
Italy also, the sales volumes are likely to be better. Sales
G.S. Rathore
Volume would be better and the product mix and the market mix looks to be much better this year. So we would get a better overall EBITDA financial performance.
Ashwin Bajaj
So overall both assets will show better performance. Visa vis FY26.
Rahul Gupta
Okay, got it.
Ashwin Bajaj
Thank
Operator
You. Next question is from the line of Jaishanteep Singh Chadha from Nomura. Please go ahead.
G.S. Rathore
Hi. Thank you for the opportunity and congratulations you know, for a good set of numbers. So my first question is in line with you know, one of the so just wanted to put the method again into context. So asking in a number of ways in the near term and in the sustainable, you know, how do you, how do JSW still look at its leverage? How, how is management, how much is management targeting the net debt to a better in the near term and also sustainability. So just wanted to understand the peak at and you know, sustainable network will be
Ashwin Bajaj
I think when Jayan in his opening speech did mention it, we have divided our
G.S. Rathore
Upper limit headroom from 3.75 down to 3 and that basically means we are much more comfortable event wise. We are in this CAPEX journey. Instead of giving an absolute net debt number, our preference will be to track the leverage ratios.
Ashwin Bajaj
We are, as I said, we are hopeful of a lower net debt to EBITDA numbers. Therefore we have revised our cap and we are comfortable below 2.5. Yes,
G.S. Rathore
Understood, sir. And sir, my next question is a little structural. I just wanted to understand when we look at your JV expansion plans jsw, you know, expansion plans for the next decade also we see that a largely brass furnace will govern the expansion phase. Right. All the scrap is on a smaller term you are putting in. So how far is India actually investing in scrap based ef or ef assets? So how will last 1x keep on dictating the expansion in the.
Ashwin Bajaj
So even in our today’s mix, if I were to see I think about more than maybe close to 1/3 or 30% plus is electric arc furnace based. Going forward we have mentioned that we would be putting up a facility in Salao of 4 million tons for green steel which will be against DRI and scrap based. We are also now adding scrap processing facilities and in the country we are beginning with west. Then we will add one more in south which have already. We have already started creating a supply chain for scrap buying and that’s improving every year.
So we are increasing scrap collection and putting it back into our furnaces. So that will further even in the converters. If you do that it will further bring down your overall emissions. But having said that, we must be conscious of the fact that India doesn’t have too much of scrap generation as we speak. It will take time for India to generate scrap on its own. Scrap availability from Europe or from US may go down with their own focus on scrap based production. The cost of steel or the cost of the technologies are also higher.
For now the best technology for India is blast furnace based and using various technologies to reduce the emissions from the blast furnace based steel fuel consumption, circulating gases back using recovery gases and putting it back into the blast furnaces to reduce your met coal. All those dehumidifier various technologies are being used to reduce the emissions from the blast furnaces. That combination with the grade of iron ore we have makes better sense.
Operator
Thank you. Thank you. Next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Rahul Gupta
Hi, thank you for taking my question. So industry grew by industry demand grew by 8% in fiscal 26 while you grew by 12%. And if I adjust numbers for BPSL and BMM you are guiding for again 12% growth for fiscal 27. Does that mean that you remain confident that the industry would grew at around 8%? That is number one and one related question I have is your capacity expansion guidance is at around 12% CAGR through the years. So does that mean that you would continue to grow at around 1.5 times of the industry continuously for the next few years?
Thank you so much.
G.S. Rathore
Yes, I think you know we all of us agree that you know India would be growing close to about 7% of GDP and the elasticity for steel growth is close to 1.3 times to the GDP and we have seen this in the past several years. Our guidance is about 8 to 9% or 7 to 9% could be the growth in the steel market in the coming year. And the way India is growing, the way India is likely to be, we have no doubt that it would be growing close to about 8 to 9% of the steel size. Now this is the overall steel out of which a flat steel is part of it.
And we are largely getting to the flat steel. And we have no doubts that about 10 to 12% of market sales growth for JSW would be a challenge on those lines. So we are quite confident on that.
Ashwin Bajaj
So our growth for sales for this year is about 10%.
Rahul Gupta
If I adjust, if I adjust BPSL from the base and BMM from fiscal 27 that implies around 12% growth, right?
Ashwin Bajaj
No, the way we have given our guidance, it’s excluding BPSL and including bmm.
Rahul Gupta
Right? Exactly. So if I adjust, if I adjust BBCSL from fiscal 26 base as well, your growth would be more like 12%, right?
Ashwin Bajaj
It will it be adjusted growth from BPSL? If you network. According to me it’s about 10%. You can our investor 10% and production is 13%. Yeah, but they can clarify that. If there is any doubt we can
Swayam Saurabh
Reconcile that also.
Operator
Thank you ladies and gentlemen. We’ll take that as the last question for today. I now hand the conference over to management for closing comments over to you.
Ashwin Bajaj
So thank you operator. Just one clarification I would like to make. This is Ashwin Bajaj. We’ve got some queries, you know. So regarding the accounting impact of ppsn we have a slide page number five in the present. Kindly refer to that BPSL has been deconsolidated at March end and the numbers for BPSL will not be part of financials of ebitda. It would be equity accounting. And there is a line in the PNL which says from associates and joint ventures. So that’s where BPS
G.S. Rathore
And financial goods is. So over to Mr. Acharya for any closing comments.
Ashwin Bajaj
I think as we highlighted we. We had a transformational year. Our operational performance has been strong. Our balance sheet is much stronger and we have deleveraged making the foundation for the next phase of growth. We have targeted 62 million tonnes in India by FY32. In addition to the joint ventures which would cumulatively add 16 million tons. We believe that India centric growth, India is in a very long time growth story for a decade or two. And we would be able to support that growth in the industrial ecosystem in India.
Thank you very much. If you have any other questions please reach back to the investor. Thank you.
Operator
Thank you. Members of the management team on behalf of JSW Steel limited that concludes this conference. Thank you for joining us. And you may now disconnect your line.