Jindal Steel & Power Limited (NSE: JINDALSTEL) Q3 2026 Earnings Call dated Jan. 31, 2026
Corporate Participants:
Vishal Chandak — Head, Investor Relations and Strategic Finance
Gautam Malhotra — Chief Executive Officer
Sushil Pradhan — Head, Flat Products
Sunil Agrawal — Chief Financial Officer
Analysts:
Prateek Singh — Analyst
Vikash Singh — Analyst
Parthiv — Analyst
Amit Murarka — Analyst
Sumangal Nevatia — Analyst
Jashandeep Singh Chadha — Analyst
Rahul Gupta — Analyst
Tushar Chaudhari — Analyst
Pallav Agarwal — Analyst
Ashish Kejriwal — Analyst
Siddharth Gadekar — Analyst
Kamlesh Bagmar — Analyst
Raashi — Analyst
Ritesh Shah — Analyst
Rajesh Majumdar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Jindal Steel Limited Q3 FY ’26 Earnings Conference Call, hosted by IIFL Capital Service Limited. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask question after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.
I now hand over the conference to Mr. Prateek Singh from IIFL Capital. Thank you. And over to you, sir.
Prateek Singh — Analyst
Thank you, Pari. Good afternoon, everyone, and welcome to the third quarter FY ’26 earnings call of Jindal Steel Limited.
Without further ado, I will now hand over the call to Mr. Vishal Chandak, Head, Investor Relations and Strategic Finance, to introduce the management attendees and take it forward. Over to you, Vishal.
Vishal Chandak — Head, Investor Relations and Strategic Finance
Hi Prateek, thank you very much. Thank you very much, ladies and gentlemen, and appreciate you coming over a weekend. I once again welcome you to the Q3 FY ’26 earnings briefing of Jindal Steel. We have with us senior management of the company, Mr. Gautam Malhotra, CEO; Mr. Sabyasachi Bandyopadhyay, Whole Time Director; Mr. Pankaj Malhan, Executive Director, Angul; Mr. Sunil Agarwal, CFO; and Mr. Sushil Pradhan, Head, Flat Products.
I request all the participants to ask questions, which are strategic in nature. And for any factual related queries, we are always there to help you out.
Without much ado, I will hand over the floor to our CEO, Mr. Gautam. We also have our Whole Time Director, Mr. Damodar Mittal as well on the line. Over to you, Gautam, sir.
Gautam Malhotra — Chief Executive Officer
Thank you, Vishal. Good afternoon, ladies and gentlemen. Welcome to Jindal Steel’s third quarter FY ’26 earnings briefing. I appreciate this is a a Saturday afternoon. So sincere thank you for finding the time to join us.
From a macro perspective, let me start by touching upon the supply-demand imbalance in the Chinese steel industry, which clearly has an impact on global markets, including India. The downtrend in Chinese steel demand continues to outpace the decline in domestic steel production, resulting in record exports of 119 million tonnes in calendar year ’25. This level of low-priced exports has prompted several countries to impose tariffs and non-tariff barriers to curb the impact of Chinese steel imports on the local markets. Focusing on India’s performance during the quarter, crude steel production rose 2% quarter-on-quarter to 42.5 million tonnes in Q3 FY ’26, whilst demand increased only by 0.5% quarter-on-quarter to 40.7 million tonnes. Trade dynamics improved materially. Exports increased 30% to 2.5 million tonnes and imports reduced by 36% to 1.6 million tonnes sequentially. Consequently, India turned a net steel exporter again in Q3 FY ’26 for the first time after six quarters, with net exports of 0.8 million tonnes.
On trade measures, following the DGTR’s recommendation, the Ministry of Finance has notified a definitive safeguard duty on select steel imports for a period of three years on ad valorem basis. With step down rates of 12% in year one, 11.5% in year two, and 11% in year three, ending on 20th April 2028. During the quarter, domestic steel prices in India corrected on the back of weak demand. HRC prices remain under pressure due to weak Chinese steel prices, while TMT prices reflected subdued construction activities. However, prices have recovered since mid-December 2025 after a prolonged correction, and we further expect support in Q4 with improving overall demand dynamics.
Coming to Jindal Steel, the business update. On projects, we operationalized SBPP Module 1 of 525 megawatts during the third quarter FY ’26. We are happy to report that we have also synchronized SBPP Module 2 of 525 megawatts again with the grid in Jan. 2026. With this, we have achieved yet another major milestone of turning around 1,050-megawatt power plant that we have acquired under the IBC. We are also pleased to report that we have commissioned CCL-1 with a capacity of 0.2 million tonnes per annum in Jan. 2026. This broadens our product portfolio and supports further margin enhancement going forward. We have opened the Utkal B1 mine and overburden removal is currently underway. The 3 million tonne per annum basic oxygen furnace 3 at Angul remains on track for commissioning by Q4 FY ’26. And upon commissioning, we will reach 15.6 million tonnes of steelmaking capacity. All other projects are progressing as planned and remain on track for commissioning within the scheduled time lines.
Coming to the financial results. Total production in Q3 FY ’26 increased 25% quarter-on-quarter to 2.51 million tonnes. This was supported by two factors. Firstly, the ramp-up of the BF2 and BOF 2 facilities at Angul. Secondly, our newly commissioned Bhagavati Subhadrika blast furnace 2 achieved capacity utilization of 48% in Q3 FY ’26 with an exit run rate of 58% utilization. Sales volume rose 22% quarter-on-quarter to 2.28 million tonnes, driven by higher production. Consolidated third quarter FY ’26 gross revenue increased 12% quarter-on-quarter to INR15,172 crores, driven by higher sales volume, but partly offset by weaker steel prices. Consolidated adjusted EBITDA for the quarter was INR1,593 crores, translating to a margin of 10.5% and EBITDA per tonne of INR6,981. However, this includes a onetime BF2 start-up cost of INR350 crores. And if we take this non-recurring expense out, the underlying business EBITDA for the quarter is higher by INR1,535 per tonne, taking the EBITDA per tonne to INR8,516 for the quarter.
Consolidated PAT for the quarter, again, post the onetime start-up cost was INR189 crores. Our blended steel NSR was down by about INR3,000 per tonne on a sequential basis as the incremental volumes was skewed towards HRC, which carried the lowest realizations and margins in our product market. Within HRC, our sales emphasis was on high throughput productivity-driven segments and sizes rather than lower volume value-added grades. The shift in product mix further compressed the ASP. In addition, our byproduct revenues did not grow in line with our steel revenue as the coke oven plant was commissioned towards the mid of Q3 FY ’26. Further, the lower byproduct sales and other operating income also contributed to the drop in ASP on a quarter-on-quarter basis due to the increased captive consumption.
On the cost front, during the Q2 earnings call, we guided for an increase of $3 to $5 per tonne in coking coal for quarter three. Our actual coal consumption cost during the quarter increased by $2 per tonne. During the quarter, BF-2 ramp-up was executed using higher cost bought out coal coke at a higher coke rate, resulting in higher operating costs. With the commissioning of an additional coke oven battery in November ’25, coke costs are expected to normalize and the BF2 coke rate has already begun to stabilize. Supported by improving steel realizations, we expect a meaningful improvement in performance in Q4 compared to Q3.
On the CapEx front, we invested INR2,076 crores during the quarter. With this, our cumulative CapEx under the current expansion program up to 31st December 2025 is INR32,925 crores as against our total announced CapEx of INR47,043 crores. We are investing in our long-term growth, creating assets that will support India’s infrastructure build-out. Our investments are not limited to adding new capacity, but also include strengthening our existing portfolio of assets. This will ensure best-in-class capacity utilization, improved asset reliability and higher profitability in times to come. This financial year marks an inflection point in our transformational journey to build world-class assets.
Coming to our debt profile. Consolidated net debt as on 31st December 2025 was INR15,443 crores, up INR1,287 crores sequentially. Accordingly, net debt-to-EBITDA was at 1.72 times at the end of Q3 FY ’26. This is primarily a reflection of lower EBITDA and our CapEx commitments on the commissioning of several facilities. We are excited about the ramping up of production and the incremental revenues and cash flows are expected to lower our net debt to EBITDA to sub-1.5 times levels. At Jindal Steel, AI and digitalization are core to our operations, driving productivity, efficiency and resilience at scale. We are executing a multiyear enterprise-wide AI transformation focused on throughput improvement, cost efficiency, faster decision-making and margin expansion. Moving beyond pilots to scale deployments now. AI-led enterprise intelligence is embedded across sales, dispatch, logistics and CXO decision support, delivering real-time visibility and actionable insights.
Sustainability is at the core of what we do each day at Jindal Steel. With that in mind, I’m pleased to share that in our first year of ESG assessment and disclosure, Jindal Steel has been included in the S&P Global Sustainability Yearbook 2026. Out of nearly 8,500 companies assessed, we are among a select group recognized for this prestigious inclusion, an endorsement of our disciplined ESG execution, which remains central to our strategy. We have also been awarded an India-Sweden Industry Transition Partnership feasibility project to evaluate a CO2-neutral steel production facility, reinforcing our expertise in decarbonization and commitment to sustainable growth. These sustainability acknowledgments and digitalization efforts are the culmination of all the dedicated work being done by the Jindal Steel team across India, and this is something that we are very proud of and keen to build on going forward.
For Q4 FY ’26, we expect coal consumption costs to rise by $18 to $20 per tonne sequentially. Iron ore costs increased further in Jan. Domestic steel prices are currently higher by about INR3,000 to INR3,500 per tonne as compared to December ’25, and we expect prices to remain supported in Q4 FY ’26 on the back of strong demand and strong tailwinds.
With that, I will open the floor for Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of Vikash Singh from ICICI Securities. Please go ahead.
Vikash Singh
Good afternoon sir. And thank you for the opportunity. Sir, my first question is directed towards — sorry, my first question is towards the realization impact, which was talking about only INR3,000. But if we just calculate on the average side, the drop is much higher, almost INR5,500, INR6,000. So how much is because of the product deterioration? And what else we are missing in here?
Gautam Malhotra
As I mentioned in my — yeah, can you hear me?
Vikash Singh
Yeah, please go ahead.
Gautam Malhotra
As I mentioned in my opening statement, we did ramp up our capacities with lower-margin products, and it was mainly skewed towards HRC. And as we are actually ramping up, when we were on a lower output on our hot strip mill, we were actually producing lower productivity, thinner grades and with very high value add and the margins were higher at that time. As we are ramping up, actually thickness levels are increasing, our productivity is increasing. So the realization per tonne over there is lower, although we’re producing much more. Also, roughly about INR3,000 is on account of NSR on this account. The byproduct sales were lower. We actually increased the capital consumption on most of our byproducts as our steel production is increasing and the balance is coming from there. As our capacities ramp up, actually, we do expect that all our byproducts will be consumed completely internally. Thank you.
Vikash Singh
So effectively, on an average, our realization blended, but it would increase lower than what the market is because of the byproduct credit would not be available. Is that assumption is correct?
Gautam Malhotra
Yes, but our cost will also come down. And overall, if you see as our capacities ramp up, our EBITDA is actually accretive in that nature. We’ll actually keep on adding to EBITDA.
Vikash Singh
Noted, sir. Sir, my second question pertains to our cost savings exercises like slurry pipeline, coal mines coming versus the product mix deterioration, would those cost savings as per your internal estimates are good enough to cover for the product mix deterioration? Or we would see for next one and half years, our overall product would continue to deteriorate from the current point of view?
Gautam Malhotra
See, I think using the word deterioration would not be correct over here. That’s a strong word. You understand quarter three was a tough quarter and for the entire industry. And if you look at the overall realization, HRC was the most affected out of all the products. So overall, as we move up and realizations have also started increasing, NSRs have also increased. So there’s no deterioration in the product mix. Rather, our portfolio, as we’ve maintained over a period of time, is getting more balanced towards 50% flat and 50% long. I think that’s a great diversification and provides a lot of strength to the company in times to go forward.
Vikash Singh
So just to answer my question, would that the cost saving would be able to cover for this change in product mix?
Gautam Malhotra
Yes, definitely, [Speech Overlap] as results come out.
Vikash Singh
Yeah, so deterioration, basically, we were a little bit baffled because some of the peer group having higher weightage on the flat side had less decline in their average realization. So we are still a little bit unsure about why — how our product mix has changed.
Gautam Malhotra
I’ll explain to you again. Two things. Our portfolio has a larger portion of long, especially TMT, and that was actually hit more in terms of the realization drop from the previous quarters. Secondly, as I explained, whilst we were ramping — when we were on a lower production on our HRC, we were actually making more value-add products because we had limited steel. Now as we’re moving towards higher output on HRC, we’re actually producing lesser of those grades. We’re actually producing more of the thicker sections to get the higher productivity and thereby more EBITDA. So that’s why you see the difference between the peers and us, if that explains it.
Vikash Singh
Got it sir. Thank you. That’s all from my side.
Operator
Thank you. The next question is from the line of Parthiv from Anand Rathi. Please go ahead.
Parthiv
Hi, good afternoon. Thanks for the opportunity. Just quickly continuing the previous question forward. One of your peer who has already declared the result, the share of exports has actually increased at a time when people who were actually front loading, especially to a lot of these geographies where there will be a lot of restrictions due to CBAM, especially in EU. However, your share of exports has gone down to, I think, 5%. That’s number one. And also just quickly to check with that if you are making thicker HRC and lower value-added products, would it make more sense to shift it back towards higher value-added product to get that benefit of something over and above your regular blended realizations because this is actually impacting your ASP to a great extent.
Gautam Malhotra
So I’ll answer the first part of the question. You mentioned about exports. As you look at the markets in the last quarter, the exports realization were actually lower than the domestic market, even further down. And we actually managed to penetrate the Indian market with our expanded production and make space for ourselves in a market, which was not expanding itself. That actually shows great strength in the Jindal Steel brand and our capability to penetrate these markets in tough times as well. What I was talking about was the ramp-up phase. I do agree with you and your point is a very valid one. As we ramp up towards full capacities, first target will be capacity utilization. And once we reach very high numbers on utilization is when we’ll start skewing the portfolio back again towards value-added profiles more and more. So I hope that answers both parts of your question.
Parthiv
Sure. But just quickly because you said you actually expanded your market share eventually, right, because you were able to capture higher share in the domestic market. But was it at a cost of compromising your margin?
Gautam Malhotra
No. Actually, compared to exports, our margins in domestic were higher.
Parthiv
No, not compared to [Indecipherable] sir. Purely on the domestic front, even if you see HRC was down about INR2,500, 800, your loans were down about 700 —.
Gautam Malhotra
We sell at competitive prices in the market. We didn’t take any large discounting to get into the market to get market share, if that’s your question.
Parthiv
Okay. That actually answers. Sir, my second question was on debt level. If you see one of your slides that Slide 20, right, your debt in Q3 are at multiyear high as high as — even higher than FY ’22 levels. And even if you see your leverage is quite high at 1.72, where we appreciate you giving out a guidance of 1.5 times threshold. Just wanted to get your understanding with your capacity still ramping up your new capacity also coming up in Q4, which will also have some kind of a start-up cost associated some way or the other. What is your exit run rate of leverage or net debt expected in current financial year?
Gautam Malhotra
So I think, firstly, we should appreciate this is a very good leverage level overall. Even looking at the industry, it’s a very, very healthy leverage level. If you look at our debt-to-equity ratios also, they also remain very healthy. Yes, we are at a point where we are coming out of a very tough market cycle, which is for the industry. And at the same time, we actually are at the culmination of our project phase in these two quarters, quarter three and quarter four. Now these factors combined have pushed it up to 1.72 net debt EBITDA, which you’re looking at. But overall, as I said, as we stabilize, ramp up over the next two, three quarters, you’ll see it coming back in line to what we’ve always guided 1.5 times through the cycle. And we intend, and we remain committed to that.
Parthiv
So any number on the exit run rate for debt?
Gautam Malhotra
No, I think I’ve given you the overall picture as it is panning out.
Parthiv
Sure. And just sir, again, just circling back to my very first question because I think your flat to long is right now 50-50, whereas it was supposed to flats was expected to be much better off at 60%, 65% going forward. So is that time line or is that run rate still intact to take your flats to 60%, 65%? Or what’s your understanding on that?
Sushil Pradhan
Yeah, so good afternoon. I’m Sushil Pradhan, I’m Head of Flat Products in Jindal Steel. See in Q3, our flat-to-long ratio was almost equal, 50-50. And that is because we saw a major decline in flat product rather than long products. So we maintained our product ratio shifted more towards long in the quarter. But going forward, we expect a gradual shift towards flat. And as demand from flat product and demand prices for flat product is rising and demand from automotive appliances and all these segments is gradually moving up, right? So accordingly, this mix is expected to go up in flat. I think in the Q4, we see a shift towards 55-45 type of ratio in Q4 more towards flat. Flat 55, long 45 sort of ratio.
Gautam Malhotra
Hi, this is Gautam. I just wanted to add, please understand and we are at a very big inflection point in our journey in Jindal Steel. There’s a large capacity coming in. There’s huge ramp-ups happening. And whilst we’re going through the cycle, we’ve actually maintained a very healthy balance sheet picture overall. So this is a very interesting year for us. We are at an inflection point. It is actually leading up to some very exciting times coming ahead as these capacities start swing our EBITDA and cash flow.
Parthiv
Well said. That’s actually quite helpful. Thank you so much.
Operator
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Amit Murarka
Hi, good afternoon. Thanks for the opportunity. So on the power capacity expansion, just wanted to understand like now that you will be excess, I believe, power capacity, would you be kind of looking to ramp up those capacities and maybe sell more merchant power or it will be purely used for steel operations?
Gautam Malhotra
At the moment, as I mentioned, our first unit is under stabilization and the second unit has just been commissioned, and we’re going to be stabilizing it over the next two, three months. Whilst that happens, our capacities will continue to ramp up. We have another 3 million tonnes coming up and associated downstream coming up. So in the near-term future, we’ll be actually — as we ramp up all sides of the capacity and the whole facility, we’ll be consuming a large portion of it internally at the moment.
Amit Murarka
Okay. Okay. And just a question on your mix. So while as you mentioned that initially in the initial phase, possibly the mill mix could be a bit weak. But by when do you think like in terms of maybe quarters or year, kind of be able to get into a more value-added mix portfolio on the expanded capacity also?
Gautam Malhotra
See, I want to actually come away from these words of iteration and weak. When I do say that we shifted a higher productivity order book, our value added profile still remains at 66%, and that’s very high. What we are comparing that to is 71% in Q2. So that’s where we’re coming from, but it’s a very high value added percentage in our product portfolio. So I don’t think it’s weak from any perspective. It’s just that we’re in a ramp-up phase. We’re making a market entry into a product, and we are capitalizing on all opportunities that come over.
Amit Murarka
Yeah, no, by weak, I mean, I think you mentioned that you had almost like INR1,000 additional hit to realization because of the shift in the mix. So I was referring more to that. So that can you get the INR1,000 back in that sense —.
Gautam Malhotra
So as we speak, the markets have already rebounded. And I did mention, I think, in the opening statement itself that today, we are working at about INR3,000 to INR3,500 higher than where we were towards the end of the last quarter. And as we move ahead, you will see our value-added profile start inching back towards 70%. So I’m not reading too much into this INR1,000 differential, and that differential is more as a comparison from Q2 to Q3 in our books versus what is happening in the peers’ books. I’m more interested in how we’re coming out of the situation as we move forward. The more interesting bit will be ramping up our capacities, increasing the utilization, getting the EBITDA in and the higher cash flows.
Amit Murarka
Sure. Got it. Thanks a lot. Just — and just the last question. So you say that in this quarter, you consumed the byproducts internally, which was also an additional hit to realization. So what were those byproducts? If you could explain that a bit? Like is it pellets? What would be those byproducts?
Gautam Malhotra
You’ve got it. It’s pretty much that. But please also understand that the — you’re seeing at the ASP level, but at the EBITDA level, the hits are not anything material or not significant.
Amit Murarka
Okay. Got it. Thanks a lot.
Operator
Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, good afternoon and thank you for the chance. I have two set of questions. First on the expansion plans. Now we shared that our next blast furnace — BOF sorry, is on track for fourth quarter. So I want to understand what is — when is the associated metallic capacity coming? And what is our plan to use this BOF in FY ’27 given the lack of metallics? And in general, just the strategy of commissioning this ahead of metallic capacity?
Gautam Malhotra
So in terms of going forward — so we’re talking about the current CapEx cycle, you’re right, BOF will be commissioned in this quarter. Anything going forward, we’ll be guiding in the next quarter on how we’re panning out on that. At the moment, we’re very, very focused on commissioning all the current projects and realizing revenue, EBITDA and cash flow from them.
Sumangal Nevatia
Yeah, so just want to understand what is the plan to use this blast furnace BOF in FY ’27 in absence of metallic capacity?
Gautam Malhotra
We’ll be able to use about 60% to 66% of this capacity in FY ’27 as well.
Sumangal Nevatia
Okay. So the associated DRI or BF, I think it’s DRI. So when is that being planned to commission?
Gautam Malhotra
I think we’ve spoken in one of the earlier calls that we are targeting FY ’27 end for that, and we’re sticking to that.
Sumangal Nevatia
Okay. So even without that, we are looking at 60% utilization for this BOF?
Gautam Malhotra
Yes, FY ’27.
Sumangal Nevatia
Okay. And sir, with respect to slurry pipeline, I just want to understand what are the reasons for the delay? I mean we still see only 94% complete. And what sort of contribution will this have in FY ’27 in terms of actual slurry transfer and cost savings?
Gautam Malhotra
So see, one thing we have to understand, slurry pipeline is never an easy project. It has a lot of regulatory and other hurdles that you have to go over and basically ground level hurdles as well. We have maintained our guidance for the end of this financial year for the slurry pipeline, and we are on track for that. As far as the savings, et cetera, I think we are very fairly comfortable to say that we’ll be able to go towards INR750 to INR850 a tonne on that.
Sumangal Nevatia
Okay. Okay. Sir, my next question is on the sales volume guidance. We just two months left for the year. So where are we with respect to our 8.5 million to 9 million tonnes guidance for sales volume this year? Can you give some more further color on this?
Gautam Malhotra
We’re actually on track to hit the guidance that we’ve already given to you.
Sumangal Nevatia
Okay. And just one last question on the margins. So I mean, given that we’ve seen in three quarters, a deterioration of almost INR16,000 to INR7,000, just want to understand, I mean, this ramp-up and start-up cost, has this been going as per plan? Was this anticipated or there has been some negative surprises because it’s quite difficult to appreciate INR350 crores of start-up cost. We’ve not seen that in other companies and it looks like — I mean, just want to get some more grip and understanding on this.
Gautam Malhotra
So I’ll say two things. I always — I don’t like going on what peers are doing. Everybody is good in their areas. But — there are two points over here. We have been fairly open and transparent about how we’re going about our business, and we’ve maintained that over a period of time, and we intend to continue doing that. Coming to the second part of your question, yes, a large part of it, when you’re ramping up a facility, especially a blast furnace, it’s not immediate that you get down to your capacity utilization numbers or your coke rate. It takes a little bit of time, and that was anticipated. Nevertheless, I don’t think we’re in a position to say that we didn’t receive any surprises. Yes, there were surprises along the way. But I think I must say kudos to our team, which has been able to counter those surprises and ensure that as we sit today, we are at a very high capacity utilization number with industry standard coke rates and operational parameters. So I think they’ve done a brilliant job of coming on track on a furnace of this size in two to 2.5 months.
Sumangal Nevatia
Okay. And if I may just ask one question just to understand what is the base level of profitability for us to kind of have a better forecasting capability. What is the contribution of these byproduct sales, say, from FY — in FY ’25 or, say, 1H FY ’26, so that we just, I mean, get to some base level of profitability from where we can kind of forecast future earnings?
Gautam Malhotra
I think there are a lot of things in your question. It’s got a lot of years spanning it and some forecasting as well. So in the interest of time, I think I’m asking Vishal to take it offline, if you can connect with them and he can help you with that.
Sumangal Nevatia
Sure, sir. I’ll connect with Vishal. Thank you and all the best.
Gautam Malhotra
Thanks a lot.
Operator
Thank you. The next question is from the line of Jashandeep Singh Chadha from Nomura. Please go ahead.
Jashandeep Singh Chadha
Hello. I hope I’m audible and thank you for the opportunity. And most of my interesting questions have been taken by my peers. So I’ll start with, sir, how much — so I see that you have commissioned coal mine as well. There is one iron ore mine also has been commissioned. With that and the global coal prices going up, what sort of impact do you think will hit the company in fourth quarter? If we can start with this.
Gautam Malhotra
Sorry, can you — I didn’t understand. Can you please repeat the question?
Jashandeep Singh Chadha
Yes, sir. So I just wanted to understand the input cost escalation that we might see in fourth quarter for JSPL industry.
Gautam Malhotra
I don’t think we’re expecting any input cost escalation in the fourth quarter. There’s only one thing, which I think I have given in the opening statement is on the coking coal prices. But if you see the market has more than commensurate increase. So I think there’s no material input cost escalation that we’re going to see apart from that.
Jashandeep Singh Chadha
Okay. So largely, what I can understand is we are expecting a flattish input cost. Is my understanding right?
Gautam Malhotra
Apart from coking coal, yes, nothing there.
Jashandeep Singh Chadha
Okay. My second question is largely from FY ’27. I understand you have given guidance for FY ’26 and you are on track on maintaining that guidance. I also understand companies at an inflection point and ramping up capacity is not that easy. From that perspective, how do you see FY ’27 panning out in terms of production and volume? If you can give some sense on that, that would be great.
Gautam Malhotra
So I think I’ll pick on one thing you said at the beginning of your question. We are at an inflection point, yes, I did say that. And please understand we are maintaining a guideline, our guidance given in a year where we are commissioning capacities, ramping them up and sustaining our guidance as well. So I think I must — even on this platform, congratulate our team for having been able to do that, at least be on track for that towards the end of the year. In terms of FY ’27, I think we’ll be coming out very soon. We are in the process of finalizing our business plans for the year. And as soon as we do that, I think at the end of the next quarter, we’ll be coming back to you and giving you guidance for that.
Jashandeep Singh Chadha
Understood. But just one last question. Compared to when you initially announced this first phase of expansion sometime in FY ’22, early FY ’23. And now since you are at the end of most of the Phase 1 expansion, how much of the CapEx that you earlier envisualized and now which you have realized, how much has been the CapEx cost increased because of the various surprises that you face various challenges and delays. So what sort of CapEx increase would have been there?
Gautam Malhotra
I think there have been no material project cost overruns. I think there’s a lot of — over the years, there’s been a lot of projects that have been added into the scope rather than any major cost overruns. I think if you go back in time, two, three quarters back, we did talk a lot about it, and there’s — I think it should be available. Otherwise, you can connect offline with Vishal if you need further help.
Jashandeep Singh Chadha
Sure, sir, definitely. I will connect with Vishal. Thank you so much. I will join back the queue for further questions.
Operator
Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead. Hi, thank you for taking my questions. I have two questions. One, sorry for getting back on the steel prices question. You said that the steel prices are up by around INR3,000 to INR3,500 versus quarter end. And given trajectory for realizations has been worse than how steel prices fared in third quarter, is it fair to say that if steel prices remain where they are, you would see a much better trend in realization versus this INR3,000 to INR3,500?
Gautam Malhotra
Can you kindly repeat your question, please?
Rahul Gupta
So what I’m asking is that steel prices, as you said, has increased by INR3,000 to INR3,500 versus quarter end. That was — but in the third quarter, your realization trends were weaker than how steel prices fared. So is it fair to say now that your blast furnace ramp up and HSM capability will ramp up, your realization trends will be much better than the steel prices spread of INR3,000 to INR3,500?
Gautam Malhotra
Yes, you’re right, and they’ll be in line with the industry. And I think you’re referring to that incremental thing, which you’ve been referring to. That won’t be there. We realized more than that and we will be in line with industry trends as we move forward.
Rahul Gupta
Got it. My second question is more medium term and strategic. Now that you are ramping up flat capacity. Over the past couple of years, you have strategically moved away from export market and focused on the domestic market. Now that EU prices are supposed to move up on back of CBAM, is it fair to say that you would be actively looking at the European market from here over the next two, three years?
Gautam Malhotra
No. So we — as you have seen in the past, we are predominantly producing material for the domestic industry with a very strategic focus in the internal market. And you are right, our major market has been European market for plates. Now with HSM coming in, also the prime focus will be on European market, but that will be around 5% to 10% range only.
Rahul Gupta
Got it. Thank you so much. Wish you all the best.
Gautam Malhotra
Thank you.
Operator
Thank you. The next question is from the line of Tushar Chaudhari from Prabhudas Lilladher Private Limited. Please go ahead.
Tushar Chaudhari
Good afternoon, sir. And thanks a lot for the chance. Sir, I missed a few numbers from your initial opening remarks. INR350 crores you said for onetime blast furnace setup cost and there was INR189 crores that was regarding?
Gautam Malhotra
The PAT is INR189 crores for the quarter.
Tushar Chaudhari
Okay. For the flat products now we have with all the new setup [Indecipherable] do we have all the approvals from OEMs like autos and consumer durables for next few years from next few quarters, we will start improving our product mix.
Gautam Malhotra
Yes. So we already come in supplies to auto and engineering industry, and we have necessary approvals from this industry. But then since our flat product capacity is more plates and HR, so it will be more into commercial vehicle segment, earthmoving segment and the yellow goods segment, more of it will go into that. And we have all the necessary approvals from all these segments. And we already started supplying to the segments.
Tushar Chaudhari
Okay. And now by next year, I mean, next quarter, we will be finishing BF3 also. When will be — we will be in a position to announce next phase of CapEx? Basically, our long-term plan is to take Angul towards ’25. So any color on that?
Gautam Malhotra
So we are very focused on increasing our utilization on these assets, increasing our EBITDA, EBITDA margins and increasing our cash flow, reducing our debt to our previous guidance given for the cycle. And at the moment, that’s our focus, and we remain committed to that. As and when we make any expansion plans in times to come, we’ll definitely make sure that we keep you updated.
Tushar Chaudhari
Thanks a lot. And best of luck, sir.
Operator
Thank you. The next question is from the line of Pallav Agarwal from Antique Stockbroking. Please go ahead.
Pallav Agarwal
Yes, good afternoon sir. So I had a question on coking coal prices. So we have seen the spot prices going up to $250 levels. So do you think it’s more of a seasonal uptick and probably you should see a correction because if they sustain at this level, then you could have a push up in cost even in the first quarter of FY ’27, and that would probably offset most of the increase in steel prices. So just wanted your thoughts on that.
Gautam Malhotra
See, these are transient in nature and seasonal impacts that you see here and there, not any midterm or long-term impact that you’re talking about those one-off sharp corrections or upticks. Apart from that, I think on a lot of things, we also have a long-term arrangement as well, and we benefit from those as well.
Pallav Agarwal
So how much would part of our coking coal be coming from our Mozambique and South Africa mines, any proportion from there?
Gautam Malhotra
About 15% to 20%.
Pallav Agarwal
Sure. Also, you mentioned that your cost probably in fourth quarter apart from coking coal should be flat or similar. But any benefits from the captive power or Utkal mine opening up so that can come in?
Gautam Malhotra
See, the mines just been opened up, and we’ve already come into the near middle of the quarter. To realize any meaningful gains in this quarter, I would refrain from. But yes, in times to come, we’ll definitely see benefits.
Pallav Agarwal
Sure. Thank you so much.
Operator
Thank you. The next question is from the line of Ashish Kejriwal from Nuvama Wealth Management. Please go ahead.
Ashish Kejriwal
Yes. Hi. Thank you for the opportunity. First of all, many congratulations for successfully ramping up faster than expected your blast furnace as well as BOF capacity. That is commendable. Sir, my question is on the cost part as well as realization. If you look at — you have clearly mentioned about INR350 crores of start-up cost, which could be regarded as one-off. But if you can just give more detail into that, what could be that, whether it’s one you have said higher coke consumption as well as the coke ratio? And what else is there? And what do you think that this number could be there in fourth quarter or have we stabilized by December end [Phonetic]? That’s my first question.
Gautam Malhotra
The largest portion of that number is on account of coke because it’s bought out coke at a higher cost. It’s a little bit inferior quality to what we produce in-house. And obviously, when you start a furnace, it’s too much technical detail, and you can, I think, connect offline with Vishal. But it’s a standard process of starting up a furnace and stabilizing it. I do acknowledge your remark for commending our team for the faster ramp-up than expected. Yes, I do acknowledge that. Thank you for commending the team. And to answer the last part of the question, yes, we’ve stabilized, and we are at normal industry standard productivity, KPIs and especially profit.
Ashish Kejriwal
So sir, that means that Q4 — Q3, when we are talking about roughly INR7,000 per tonne EBITDA, I think we can begin with INR8,500 per tonne EBITDA because this is largely over. Is that assumption right?
Vishal Chandak
So Ashish, Vishal here, we do not — we actually refrain from giving guidance on EBITDA on a sequential basis. But I understand where you are coming from. If you look at, as sir mentioned, about INR350 crores is the one-off, which will obviously not recur. And steel prices have moved up and so has also the costs. By and large, our understanding is that Q4 should be a much stronger quarter in both in terms of volumes as well as in terms of profitability.
Ashish Kejriwal
Vishal, we are not asking about Q4 guidance. I’m just asking the base case that when we are saying it’s one-off, that means we can say INR8,500 could be the price could be the —.
Gautam Malhotra
Yes, the math is correct. I think Vishal gave you a good answer, but if math is correct —.
Ashish Kejriwal
Second thing is when we are talking about realization improvement, INR3,000, INR3,500 higher, are we taking into consideration the improved product mix also? When I’m saying improved product mix that maybe in third quarter because of the initial stage, we have given some of base grade HRC. But now with this improvement, ideally, our overall realization for fourth quarter should be higher than that of the industry because third quarter was much lower than the industry standard.
Gautam Malhotra
The numbers that I mentioned for the increased realizations are as a scenario right now. I think we’re only at the beginning of the quarter. I did mention in one of my earlier answers that you will see us at industry levels in this quarter. And as we keep ramping up and improving our capabilities, you’ll see us beating those numbers again as in the past.
Ashish Kejriwal
And lastly, is it possible to share non-steel sales revenue in this quarter versus last quarter? Because I understand, as you rightly pointed out that lower byproduct sales does not affect our EBITDA. But at least on the top line, if we get a sense how much was the non-steel sales revenue in this quarter versus last quarter, that will be very helpful.
Gautam Malhotra
So I think Vishal can help you offline with that, if that helps, you can connect to them.
Ashish Kejriwal
Sure, we will do that. Thank you so much and all the best.
Gautam Malhotra
Thanks a lot.
Operator
The next question is from the line of Siddharth Gadekar from Equirus. Please go ahead.
Siddharth Gadekar
Hi sir, so just first again on the one-off cost. So when we — just a suggestion here that when we give an adjusted EBITDA in the presentation, can we include the numbers because every quarter, we have a different adjusted EBITDA. And on the call also, we have a different one-off expenses every quarter in the EBITDA. So it becomes very confusing to understand what is the actual EBITDA per tonne. So secondly, in terms of our downstream, what capacities are left to commission over the next two years?
Vishal Chandak
Siddharth, this is Vishal here. Coming to the second question, over the next two years, the downstream capacities are largely commissioned, except for CCL2 and CGL2, okay? Thereafter, we have pellet plant 2 and DRI 2 are the key capacities. If there are any more production — any more lines that we plan, we’ll come back to you. Out of the 2 Q&T furnaces, we’ve already commissioned one of them.
Gautam Malhotra
But I think he was asking two years. It’s not two years. All these capacities are being commissioned as we speak. We’re in the final stages of commissioning them. It’s not two years. It’s only DRI-2 and pellet plant 2, which I mentioned earlier in my — one of my questions is slated for FY ’27 end.
Operator
Thank you. The next question is from the line of Kamlesh Bagmar from Lotus Asset Management. Please go ahead.
Kamlesh Bagmar
Sir, just wanted to get a sense on the product mix going forward because over the last, let’s say, prior to this commissioning, we had the benefit of having rail mill, then your MLSM, those all benefits for the RUBM. So going forward, don’t you think that our earnings would grow primarily because of the volumes and with the lower margin. So what’s your sense on that? Because it’s like say, during the call, the questions have been asked that our margins, which was INR15,000 in Q1, has fallen down to INR8,000-odd adjusted basis, INR8,500-odd — so — but going forward, like say, now we would be having the benefit of the volumes, but our margins would be lesser as compared to the historical levels. Because if you see in your, like, HRC, many of the capacities are coming up, be it Tata Steels or like say, AM/NS coming with a big capacity. So do you think that now going forward, the play would be on the higher absolute EBITDA rather than much richer margins as compared to the historical levels?
Gautam Malhotra
I think first part of your question. We don’t — we actually not moved away from a rail or MLSM or structure —.
Kamlesh Bagmar
I’m not saying that you have moved away. I’m saying that the share of those products or the volumes have now come down significantly because of these like say, flat-based capacities coming in. Because even if I see quarter-on-quarter, your product mix has like 49% flat, has gone up to 50%. And the HRC mill was commissioned a year ago. So now we’re saying that we have sold lesser grade HR. So it really doesn’t digest with the margins or the realization fall, which we are talking in this quarter.
Gautam Malhotra
Okay. So I’ll complete my answer. So it’s not that we’ve gone away from those. They remain a core part of our portfolio. And as we speak, we actually keep working on ways to increase those facilities output as well. Apart from that, the second part of your question is, yes, will these other products increase in our portfolio and our product mix? Yes, they will. But along with that, I think Vishal did mention that we’ve also added heat treatment furnaces. So those will add capability to our flats portfolio for higher realizations, higher value add. Apart from that, as I did mention in one of my earlier questions of the opening statement that we’ve just penetrated the market on a higher volume in this quarter. As we move ahead, our value-add percentages and value-add products will keep growing and the realizations will be back on track. So I don’t see anything in the mid- to long-term future that is of any concern at the moment.
Operator
The next question is from the line of Raashi from Citi. Please go ahead.
Raashi
Thank you. First question on your costs. So you indicated that there were start-up costs and coking coal costs were also higher. So optically, it does appear on a sequential basis that the costs are lower. So one, of course, is the volume benefit and I imagine lesser value addition. Is there anything else to read into?
Gautam Malhotra
I think you broadly covered it. you’ve got it pretty much on the ball.
Raashi
So going forward, we basically expect a reversal of the start-up costs and then we expect higher coking coal prices simplistically.
Gautam Malhotra
Yes. But please also understand that our coke output is increasing because we commissioned the batteries. And as I did mention that our coke is better quality than what we end up buying from the market. So we’ll get some offset gains from that side. And obviously, high utilizations will also give us some gains in our cost portfolio. So those things will also be there.
Raashi
Got it. Secondly, when you indicated that spot realizations are about INR3,000 to INR3,500, which is higher than the December quarter, which is you’re talking about what you are kind of billing at this point in time, right? on a blended basis, given product mix, everything put together —.
Gautam Malhotra
Yes. This is the difference in realization between where the last part of Q3 was and where we are today.
Raashi
Got it. And for the full year, the capex that you had targeted are still holding on to that, like no change in capex target for ’26, ’27, ’28?
Gautam Malhotra
No, nothing, no change.
Raashi
Got it. And one last question for me. How did the inventory move sequentially?
Gautam Malhotra
How is — what, sorry?
Raashi
How did the inventory move sequentially? Inventory —.
Gautam Malhotra
Marginally increased during the quarter. But as we speak, it’s been unwound as well. There’s no — nothing material in that.
Raashi
Thank you.
Gautam Malhotra
Thank you.
Operator
The next question is from the line of Ritesh Shah from Investec. Please go ahead.
Ritesh Shah
A couple of questions. First is a clarification. When we give guidance of sales volumes, should we presume that it is excluding any metallics purchase, be it for this fiscal or next fiscal?
Gautam Malhotra
No. Yes, there’s no metallics purchase.
Ritesh Shah
Okay. And would it be possible for you to provide a time line for the SMS, the next SMS?
Gautam Malhotra
We’ve given a guidance already that it’s going to be this quarter, and we are well on track for that.
Ritesh Shah
Okay. Second is, can you indicate coking coal on a consumption cost basis, how much did the increase from Q3 to Q4? I’m sorry if I missed that.
Gautam Malhotra
About $18 to $20 per tonne.
Ritesh Shah
That’s helpful. Just a few more questions. Sir, how do we plan on the evacuation, specifically also, if you could highlight how critical is the Paradip port over here, given Angul is in East, I’m not very sure on — you did indicate that we have the approvals to supply for HRC, given the scope of our capacity is very large. How do we plan to sell and evacuate? Some color over here would be quite useful.
Gautam Malhotra
Are you talking about evacuation from our plants?
Ritesh Shah
From Angul.
Gautam Malhotra
I think whatever we’re producing, we’ve been able to evacuate. We have the infrastructure and the capability for that.
Ritesh Shah
So this includes any incremental rail lines or it’s all ready, there’s no problem at all on evacuation?
Gautam Malhotra
No, no problem.
Ritesh Shah
Okay. And how critical is the Paradip port? Because in earlier calls, we have emphasized about it. How does that fit in an overall scale of things?
Gautam Malhotra
See, I think if you’re coming from this expansion phase that we are talking about and you were talking about at Angul, Paradip port does not impact anything for Angul capacity expansion, ramp-up, et cetera. Paradip port is a very strategic thing, and it’s a longer-term play, and it’s a benefit that we’ll be able to derive for our import and export in times to come. But if you’re coming back to the specific on Angul ramp-up, there’s no effect of Paradip and nor did we envisage anything like that.
Ritesh Shah
Perfect. Just two follow-up clarification questions. Sir, how should we look at Jindal Panther expansion? I think this is the one with the cement entity. I’m not sure whether it’s linked with the listed Jindal Steel entity. That’s one clarification. And second, I presume there would be some transfer of slag from the listed entity to this very entity. If you could highlight some color on how the transfer pricing mechanism is?
Sunil Agrawal
So this is Sunil Agarwal from Jindal. So basically, Jindal Panther has nothing linked with the Jindal Steel. It is a separate company, and we are independent of Jindal.
Ritesh Shah
Okay. And on slag?
Sunil Agrawal
Slag, we will be giving the transfer pricing as per standard norms, if we will supply to them on a long-term basis.
Ritesh Shah
Okay. And just last one, sir, would you just clarify that the Tyson bid with Jindal International has, basically, the listed entity is completely ring-fenced from it?
Sunil Agrawal
Yes, you are right.
Ritesh Shah
Thank you so much for the answers.
Sunil Agrawal
Thank you.
Operator
The next question is from the line of Rajesh Majumdar from 361 Capital. Please go ahead.
Rajesh Majumdar
Yes, good afternoon, sir and thanks for the opportunity. So I had only one question, actually two but related. Out of our total capacity of 15 million tonnes, what is the proportion that will go to the auto industry? That was the first question.
Gautam Malhotra
It will be around 3%.
Rajesh Majumdar
Only 3%?
Gautam Malhotra
Yes. Because it is really flat hot rolled. So we don’t have CRCA or related products, which are related — which mostly going into auto. So it will be somewhere around 3%.
Rajesh Majumdar
So the second question is actually less relevant, but I’ll still ask it in the sense that we’ve seen a lot of headwinds for the auto manufacturers. And Maruti also in the call actually registered the increase in the steel prices. So there is a chance of a rollback there. So do you think that the auto HRC prices will come off a little bit from the — at the negotiated levels?
Gautam Malhotra
No, we — I won’t be able to comment on that.
Rajesh Majumdar
Yeah. Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand over the conference to management for closing comments. Over to you, sir.
Gautam Malhotra
Thank you. Q3 FY ’26 was a challenging quarter. Despite the sharp decline in steel prices and muted demand, we delivered record production and sales volumes. We also commissioned several key projects, most notably synchronizing the 1050 megawatt SBPP with the grid. The ramp-up of our newly commissioned BF-2 and BOF2 facilities is in full swing and is progressively strengthening our operating profile. We expect the fourth quarter FY ’26 to be a stronger quarter, supported by a higher opening volume, improved pricing and better underlying steel demand. Industry 4.0 and AI remain central to our transformation agenda, enhancing reliability, productivity and real-time operational control across the value chain. Our key projects are progressing as planned and remain on track for commissioning as per schedule. Going forward, we will continue to prioritize safe and stable operations, disciplined value creation and sustainability to deliver value-accretive growth.
I once again thank you for your time on this Saturday afternoon. Have a good day, and have a good weekend. Thank you.
Operator
[Operator Closing Remarks]