JSW Steel Ltd (NSE: JSWSTEEL) Q3 2026 Earnings Call dated Jan. 23, 2026
Corporate Participants:
Jayant Acharya — Joint Managing Director & Chief Executive Officer
Arun Maheshwari — Director of Commercial & Marketing
Arun Maheshwari — Director of Commercial & Marketing
Arun Maheshwari — Director of Commercial & Marketing
Analysts:
Sumangal Nevatia — Analyst
Jashandeep Chadha — Analyst
Rahul Gupta — Analyst
Amit Murarka — Analyst
Parthiv Jhonsa — Analyst
Satyadeep Jain — Analyst
Ritesh Shah — Analyst
Raashi Chopra — Analyst
Ashish Jain — Analyst
Kirtan Mehta — Analyst
Vikas Singh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the JSW Steel Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing STAR and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashwin Bajaj group Head of Investor Relations. Thank you. And over to you sir.
Ashish Jain — Analyst
Yes, thank you very much, Operator. So good evening ladies and gentlemen. Welcome to JSWST earnings call for Q3 of FY 2026. We have with us today the management team represented by Mr. Jayant Acharya, Joint MD and CEO Mr. G.S. rathor, Chief Operating Officer, Mr. Arun Maheshwari, Director of Commercial and Marketing and Mr. Swayam Sourabh, the CFO. We will start with opening remarks by Mr. Acharya and then open the floor to questions. So with that, over to you, Mr. Acharya.
Jayant Acharya — Joint Managing Director & Chief Executive Officer
Yeah. So good evening everyone. Let me begin by talking a little bit on our strategy. JSW Steel has adopted a prudent strategy over the past years and has created significant value for our shareholders.
Actually for all our stakeholders. On 3 December, the company announced a strategic joint venture with JFE Steel Japan for its BPSL Steel business. With this transaction, JFE will take a stake of 50% in BPSL Steel business at an equity value of 31,500 crores and an enterprise value of 53,000 crores. This transaction will enable a cash flow of 32,000 crores and a substantial deleveraging of about 37,000 crores for GSW Steel. This partnership allows us to grow the BPSL business with our project expertise and operational excellence and bring in the JFE technological expertise to be able to produce variety of value added products.
It will also allow JSW Steel to accelerate the growth across its portfolio of assets in a financially prudent manner. To meet the demand growth in India Today, the board has approved a 5 million ton steel plant at our new site in Jagat Singhpur, Odisha. The project will be housed in our subsidiary JSW Utkal Limited and will entail a capex of 31,600 crores. With commissioning by FY30, this project is the first phase with expansion project potential to go to 13.2 million tons. We already had commenced setting up two 8 million ton pellet plants you will recall at this site.
And a 30 million ton slurry pipeline is under construction by GSW Infra which will transfer the iron ore from the mines to the plant. This is a port based facility with our own captive jetty and coupled with the ironode through this LERI pipeline. This is an extremely efficient location in terms of our overall logistics cost. Together these milestones significantly accelerate our capacity growth plans. We are well on track to reach 50 million tonnes in India by FY31 other than the BPSL business. With India’s steel demand rising rapidly, these strategic steps put JSW in a very strong position to grow responsibly and and sustainably in the years ahead.
Sorry, on the macroeconomic front you would have seen the IMF has given an outlook of about 3.3% growth in 2026 and kept its outlook the same for 2027. The resilience in the global economy in spite of the ongoing uncertainties is a mention which IMF has given in their commentary. The momentum is being supported by strong tailwinds from AI and technology investments. Growth is also getting a further lift from supportive policies and easing financial conditions. With advanced GDP estimates in India pegging the growth at about 7.4%, we remain the world’s fastest growing major economy while global headwinds persist.
The Indian government has provided various policy support measures and policy reforms alongside recent trade agreements. This bodes well for our medium term prospects. We are seeing a strong post GST momentum in consumption further aided by income tax cuts and benign inflation. Rural indicators remain positive driving strong tractors and two wheeler sales. Central government capex while was low in October November but is up 28% April to November due to a strong H1. The annual capex target looks to be on track while residential sales have remained somewhat soft. The commercial real estate shows a robust movement. Conditions for private capex is increasingly becoming conducive supported by a healthy balance sheet and RBI’s recent rate cuts and lower inflation.
India steel consumption continued to grow with a nine month growth of about 7% though Q3 was lower at 4.6%. However, the December demand on absolute number was about 14.5 million tonnes and the demand in the quarter four on a seasonally strong demand and restocking looks good for volumes in the quarter ahead. Looking ahead for the year FY27 the demand is projected to grow at the range of 7 to 9%. On the policy front, the government has taken steps to arrest unfair trade by imposing anti dumping duties on hot rolled coils from Vietnam in November and CRNO from China in December and a safeguard duty has been finalized in December 25th.
This will enable the local domestic industry to get a label playing field in India. In China the steel Production was down 4.4% YoY in CY25, a decline of about close to 44 million tonnes. However, their exports, including semifinished steel surged 14% to 133.5 million tonnes, primarily due to a weak domestic consumption. The elevated exports kept Asian prices subdued in 2025. Looking ahead, the anti involution measures which have been taken up by the Chinese government, export licensing and some production moderation which we see should help support the regional prices in Asia. Moving to sustainability JSW Steel I’m happy to mention was ranked number one in the global steel sector in the S and P Global Corporate Sustainability Assessment and continues to remain a part of the Dow Jones Sustainability Index.
Our focus on energy efficiency was also recognized at the 35th National Energy Conservation Awards 2025 where our Dolby unit was awarded India’s Best Performing Unit by the President of India and BPSL received a Certificate of Merit. We continue to progress on energy transition with 1 GW of renewable capacity commissioned. We have already got the approval for 2.5 gigawatt generation and a 320 megawatt hour of battery storage which is in various stages of construction. On the technology front, we commissioned India’s first diesel to battery converted locomotive at Vijayanagar. These initiatives underscore our commitment to sustainability across our operations.
On the digital front, JSW has deployed AI based vision systems that monitor conveyors, center flames, flare stacks and equipment in real time to improve yield and efficiency and reliability. These digital solutions are delivering substantial impact through cost savings, reduced emissions and preventions of over 1000 safety incidents. This system is deployable across multiple locations and with additional use cases we see the potential to save 100 crores per annum. On the projects front, apart from the board approval for our new plant in Orissa, let me briefly update you on the other projects. At JVML Vijayanagar we reached a key operational milestone as the 5 million ton plant is now fully ramped up.
The 1.5 million ton BF3 upgradation at Vijayanagar remains on track for commissioning by the end of Quarter 4 FY26 at Dolby, the Phase 3 expansion from 10 to 15 million is progressing as planned with completion expected by September 2027. Technical and Commercial discussions for equipment is underway for the 1 million ton electric arc furnace and structural mill announced for Kadappa last quarter. Our value added product capacity across Vijayanagar, Kapoli and Rigar are progressing steadily. The Board has today approved 0.2 million ton tin plate capacity and 0.36 million ton capacity for GI and GL lines at our downstream units in Rajpura.
Together these value added expansions will add about 4 million tonnes of flats and longs complementing our steel making operations. This reinforces our long term growth strategy and strengthens our competitive position as it adds to our value added product portfolio. Strengthening our raw material security has been one of our key strategic priorities. We have 23 iron ore mines which we have mentioned earlier out of which 12 have been operating during the quarter three we have commenced the production from the 0.5 million ton Kudnem mine in Goa, taking the total number of operational mines to 13. Once our mines are operationalized coupled with some enhancements of existing capacities and we expect to produce about 50 million tons per annum which will cover around 50% of our total iron ore requirement by FY31.
On the coking coal front, we have secured three mines and coal linkages in India and taken a stake of 30% in the Ilawara coking Coal PLV mine in Australia which together will provide us about 5 million tonnes of coking coal. This will meet around 25% of our total coking coal requirement in FY31. Additionally, we are in the process of acquiring the Mozambique MDR high grade coking coal deposit. This transaction is expected to be closed in quarter four of this calendar year by March. Therefore, the raw material side we are strengthening both from iron ore and coking coal perspective.
Moving to our operational performance, we reported a strong operational performance among amid the ongoing uncertainties our consolidated crude steel Production stood at 7.48 million tonnes up 6% YoY. For the quarter, our Indian operations delivered a production volume of 7.28 million tonnes up 7% YoY. Production was down sequentially due to the blast furnace 3 at Vijayanagar being under shutdown. For the capacity enhancement, utilization of our Indian operations stood approximately at 93% excluding the BF3. What it underlines is the consistency in the capacity utilization at JSW Steel across locations. We have been more or less at 90% or above across quarters.
During quarter three we achieved our best ever sales both from a consolidated as well as an Indian operation point of view increasing by 14% YoY. This was mainly driven by the volumes from JVML plant ramp up to its full capacity. Our domestic sales rose by 10% YoY in quarter three and 12% in the first nine months well ahead of India’s consumption growth. This has enabled us to increase our market share. We have also liquidated 0.3 million tonnes of inventory during the quarter. The other positive is that the value added product sales were the highest ever at 4.54 million tonnes growing 16% YoY and forming about 61% of our total volumes including JBML.
The deliveries to the auto and renewable sectors were also at all time highs. If you look at our financial results, the consolidated revenue stood at 45,991 crores with adjusted EBITDA of 6,620 crores. The EBITDA per tonne was close to 8,700 and a margin of 14.4%. The reported EBITDA for the quarter stands at 6,496 crores. During the quarter steel prices were at a multi year low and adversely impacted realizations. Coking coal costs were higher by $5 in line with our guidance while iron ore provided a slight cost benefit due to better blends. While margins were negatively impacted during the quarter we were able to mitigate the drop in prices through a better value added product mix and cost efficiencies.
Our Indian operations delivered a total adjusted EBITDA of 6522 crores and EBITDA per ton of close to 8800 rupees per tonne with a margin of 15%. This was enabled by a strong growth in domestic sales and better value added product mix. The US operations delivered operating EBITDA of 3.1 million which was lower, primarily driven by lower volumes due to the plant shutdown at Ohio for the caster upgradation project and lower NSR for the plates for the ninth month of FY.26. US operations have reported an EBITDA of $36 million, a substantial improvement versus an EBITDA loss of 32 million last year.
Italian operations delivered an EBITDA of 5.3 million during the quarter. During the quarter the total EBITDA for our overseas operations was at 122 crores. Unrealized forex losses stood at 124 crores which impacted the overall profitability during the quarter. With the enactment of the new Labor Code, the required changes in employee benefits have had a one time impact of 529crores which has been shown as an exceptional item in the profit and loss account the consolidated PAT stood at 2,410 crores compared to 719 crores in quarter three of last year. This profit in quarter three is after recognizing net deferred tax assets of 1439 crores related to the slump sale of BPSL steel business undertaking.
Net Debt was at 80,347 crores and our debt ratios improved versus the last quarter. Net debt to EBITDA stood at 2.91 and net debt to equity at 0.92. Our weighted average interest cost improved to 6.51% in the quarter, an improvement of approximately 60bps. If you were to compare with last year our revenue acceptances stood at $2.36 billion. Our capex spend during the quarter was roughly about 3500 crores and total for nine months stood at 10,000 crores. For the FY26 we expect the total capex to be in the range of 15 to 16,000 crores. The JSW1 platform has been doing well has seen a significant uptick in volumes, especially in steel which grew by 43%.
YOY quarter three was strong with a GMV of 4544 crores representing a solid 36% jump. YOY over 1300 crores of that GMV was driven by JSW1’s credit offerings. With these results we have achieved over 74% of our total consolidated volume guidance for both production and sales for the FY26 and we expect to broadly achieve our full year guidance of 30.5 million tonnes for production and 29.2 million tonnes for sales. To conclude, we continue to monitor Chinese steel exports and are cautiously optimistic that measures such as export licensing and anti involution policy should provide some support to the regional prices.
India’s growth prospects remain strong with the government’s recent reform measures providing further impetus to consumption and private capex on the back of rising capacity utilization of companies. The upcoming union budget is expected to continue to see the government focus on reforms as well as public capex. All this bodes well for the steel demand growth and the trade measures announced by the Government of India is most welcome and will help keep unfair imports in check. Looking ahead, steel prices have begun to recover in end December and have continued an uptrend in January. Quarter four margin should be better on the back of higher steel prices supported by seasonally strong demand which is expected to offset the impact of higher raw material prices, especially coking coal.
We expect the coking coal cost to increase between 15 to $20. While iron ore prices are expected to be range bound. We expect a strong quarter 4 volumes from JSW Steel due to a healthy demand in this quarter. And for the next year we see a steel demand growth of 7 to 9% for the FY27. We’ll be happy to take questions which you may have. Thank you.
Questions and Answers:
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 their touchtone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to please use handsets while asking a question and to limit your questions to two per participant. If you have any further questions you may rejoin the queue. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Sumangal Navatya from Kotak Securities.
Please go ahead. So Mangal Navatia, your line has been unmuted. You may proceed with your question.
Sumangal Nevatia
Yeah, yeah, thanks. Thanks for the chance. Good evening everyone and congratulations on the new expansion announcement. So first question is the bookkeeping one. If you could just highlight what is the steel price increase we are seeing in the last three or four weeks? And as far as timeline is concerned what is the update on the Slurry pipeline and the JFE Bhushan deal closure timeline?
Jayant Acharya
Yeah. So the prices of steel have started moving have started recovering from the multi year lows in the last quarter. In the end of December we saw prices moving for flat steel by about roughly 1500 rupees per tonne. In the beginning of January it has moved by about 2,000 rupees per tonne. We see some recovery possibility during this quarter as we move ahead. The second question on the Slurry pipeline which you have asked is expected to be somewhere in the quarter four of 2027. FY27 on the BPSL. I’ll request Swayam to give an update on the BPSL asset.
Arun Maheshwari
So on the BPSL asset we are pretty much on track versus the timeline we had indicated earlier this week we received competition commissions approval for the joint venture. We are right now in the process of obtaining shareholders approval which we expect to get by first week of February. As indicated we should see slum sale getting concluded before end of this year which is before end of the March. And that should Translate into about 24,400 crores of effective cash coming in. JSW Steel and net leverage reduction of about 29,000 crores. The second leg also remains on track.
But that is expected end of quarter. One of FY27, which will be an additional 7,000. Additional 7,875 crores. Yeah.
Sumangal Nevatia
Yeah, got it. I have one more question and that’s slightly on a medium to long term strategy. So if you look at our expansion FY30, we would reach somewhere on 47 million tons in India and we’ll be adding capacity only at the rate of around 7 to 8% CAGR. Now given the Bhushan divestment, a balance sheet would be quite deleveraged. Potentially around 1.5 times net debt to EBITDA. So does that, does it make sense to evaluate the other brownfield expansion opportunities parallelly or should we now just expect this expansion till 30 and then maybe evaluate sometime closer to FY 2829 as the next expansion plan?
Jayant Acharya
If you see the presentation which we have given for this quarter, we have given you an indication of the expansions likely by FY31 which takes it to about 56 million tons by FY31 which includes 1.5 million tons of Ohio and four and a half million ton of the BPSL asset. So we have moved up with respect to our earlier goal of 50 million tons of in India by the end of this decade. So I think that I would say the combination of the value unlock in BPSL certainly enables us, as you rightly said, to expand faster, which we are doing.
We have taken the Orissa project, we are doing a project in north of India for tin plate and substrate for GI and gl. And we will be able to fast track our other brownfield expansions as we go along into this decade. So we are on track. I think we would be adding capacities in line to meet the India demand.
Jayant Acharya
And so can I get your thoughts on.
operator
Sorry to interrupt sir. We request you to please rejoin the queue if you have any further questions. Sure.
Sumangal Nevatia
Thank you. Thank you.
operator
Thank you. Our next question comes from the line of Jashandeep Chadha from Nomura. Please go ahead.
Jashandeep Chadha
Hello. Hi. Thank you for the opportunity. Am I audible?
operator
Yes, we are audible.
Jashandeep Chadha
Yeah. Thank you for the opportunity. So my first question is, you know, on the lines of, you know, you are expecting 79% YoY volume growth or you know, current C consumption growth. Just wanted to understand, you know, if we go one step deeper from which segments are you expecting majority or which segments will lead this demand? We understand that the GDP is growing and overall steel consumption will go up. But specific to JSW internally also, which segment do you believe will lead that growth Is it the autos, industrial, retail, I mean or even any other segment that you see.
Just wanted to, you know, get your view on how the demand will be going ahead.
Jayant Acharya
We are seeing the growth across sectors. If you were to really look at the India story now, I think you see the growth across your construction and infrastructure. You see good growth in the commercial real estate. We are seeing good growth in industrial. And now post the GST announcement especially in the consumption side, automotive appliances. The other area is the renewable energy. And I think you, by and large, I think we are seeing it across sectors.
Jashandeep Chadha
Understood sir. So my related question to this will be has the intensity of flat products in construction, retail, real estate sector, has it gone up in the last couple of years? And along with that I just want you to understand also the new capacity that you have announced. What will be the capex intensity of that and the product mix if you can.
Jayant Acharya
The new capacity which we have announced will be flat steel. It will be a 5 million ton facility with hot strip mill and steel melting capability and blast furnace. The steel melting capability will be for roughly about 6.5 to 7 million tons. It has potential to grow. So the hot strip mill can ultimately be expanded once the second blast furnace is taken up to 6 million tons itself. Your second question about the intensity of flat steel in construction. The intensity of flat steel in construction has been increasing gradually globally. Flat steel is used in construction through steel based plated constructions.
And we are seeing that slowly catch up in India. Now steel buildings or steel and glass buildings are coming up in India. They are safer, they are faster to construct and unlocks value in terms of time. So it is catching up although at a slower pace than internationally. But we are looking at this space improving the flat steel consumption in the construction and the infrastructure. Infrastructure also the bridges which are coming up are also adding to the flat steel consumption. People are now looking at steel columns, steel supporting infrastructure for the bridges because it is able to finish the bridge faster.
So yes, it is going up in terms of intensity.
Jashandeep Chadha
Thank you for that sir. And also if you can tell me the capex for the new capacity.
Arun Maheshwari
Sorry if I missed 31,600 crores.
Jashandeep Chadha
Thank you so much sir. I.
Jayant Acharya
This is also building in some of the infrastructure for the expansion of the second phase. Yeah, understood. So the next phase of expansion will be at a lower intensity per turn.
Jashandeep Chadha
Correct? Understood sir. I joined at the Q and you know. Thank you.
operator
Thank you. Our next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Rahul Gupta
Hi. Thank you for taking My questions. So my first question is given strong volumes during the quarter as well. Now your domestic volume guidance of 28.2 million ton would imply flat volumes on year on year basis for 4Q. Now how should we look at your 4Q volumes with respect to that? Would you revise your sales guidance? That’s my number one question.
Jayant Acharya
So I think from a, from a sales guidance point of view we are maintaining our guidance of 29.2 million tonnes. Production guidance also at 30.5 million tonnes is more or less on track going forward in the next year as the BF3 capacity unlock happens we will be able to add to our available capacities and that would further increase the sales from all our assets.
Rahul Gupta
Okay, so, so, so am I, am I reading it right that your India volumes would be flat? Assuming you don’t change your guidance.
Jayant Acharya
Why do you say flat.
Rahul Gupta
On year on year basis?
Rahul Gupta
Okay, you look. So the inventory liquidation probably you’re not counting. So the potential. So we did an unlock of inventory of 300,000 tons in the last quarter. In the current quarter also we have.
Jayant Acharya
No, I meant for fourth quarter. So if I look at the fourth. Quarter I’m looking at the, I’m looking at the fourth quarter. I’m saying we liquidated inventory in quarter three. We are looking at some inventory liquidation in quarter four as well. So from a guidance perspective we had a sales of 7.64 million ton last quarter. Our guidance is that we will be able to meet 29.2 million tons. So may be similar with respect to quarter three, quarter four if that’s what you’re asking. From an Indian operations point of view we will be slightly higher but for an overall basis it will not be very different.
Rahul Gupta
Got it, Got it. Thank you. Now if I look at the detailed CapEx table that you have shared on slide 39, can you help us break down the mining Capex and also value added Capex a bit further? Thanks for highlighting Mozambique and the downstream Capex separately but can you help us with more details what all come into this?
Jayant Acharya
I think the details the investor team can explain but you’re talking about the capacity consolidated capacity update, right? That’s what we have given you in that slide.
Jayant Acharya
It’s the Capex Capex guidance for the next five years. The amount of Capex. But yeah, okay, I’ll take that offline. What we are, yeah what we are trying to say is that we will be spending this hundred thousand crores over the next four to five years. We will give you the breakup year wise in our annual board Results in May, but roughly four to five years. You can spread it equally, you know, it will be a little higher in the next year, next two years and then slowly go down.
Rahul Gupta
So I was actually looking for breakdown of mining and value added, but I can take that offline. One final question is if we look at realizations on a reported basis, Q on Q, it has been, it has been much better. Now adjusted for jvml, did share of value added products improve quarter on quarter or am I missing anything over here?
Jayant Acharya
So we have been reporting in the last few quarters we have been giving you the value added numbers without the JVML this time, including JVML, the value added product mix is 61%. Excluding JVML it is 67%.
Rahul Gupta
Okay, got it. That is helpful. Thank you.
operator
Thank you. Our next question is from the line of Amit Murarka from Access Capital. Please go ahead.
Amit Murarka
Yeah, hi, good evening and thanks for the opportunity. So first a bookkeeping question in the quarter, what was iron ore sales that you made?
Amit Murarka
Just one second. What’s your other question? Maybe we answer that first while we. Get it is about 0.13 million tons.
Jayant Acharya
Okay. And what was it the last quarter? Why I’m asking that is because like the revenues doesn’t seem to have gone down in terms of the realization decline that was expected. Indeed.
Amit Murarka
So you are seeing the standalone numbers, right?
Jayant Acharya
Yeah, I’m looking at the standalone.
Jayant Acharya
Yeah. So we’ll, you know, give you this input offline.
Amit Murarka
It’s primarily iron ore sales in Q3, you mean?
Jayant Acharya
Yes.
Amit Murarka
Okay, sure. And also when I look at JVML numbers again over there, the realization seems to have been down. So is it like some sale of some semis that has happened over there? Like what is really the reason?
Jayant Acharya
No, basically see we are. We look at JVML and Vijayanagar from an operations point of view as a combined decision making process. We have certain advantages in JVML on the cost side. We have some advantages in JVML on the state tax side. So we have a state tax advantage even if you sell outside the state, you know, so therefore outside state movement like to north, we prefer to do from there, which is a higher freight incidence and therefore you see a lower realization. But that enables us to overall optimize our total Vijayanagar Bled because the other units is able to supply to Karnataka, which has got a tax advantage in Karnataka and JVML is able to leverage the sales to other locations where we get the tax advantage.
Amit Murarka
Okay, okay, understood.
operator
And just also sorry to interrupt, maybe request you to please rejoin the queue for further questions. Thank you. Okay, our next question comes from the line of Vikas Singh from ICICI Securities. Please go ahead.
Vikas Singh
Hi sir, good evening and thank you for the opportunity. So just wanted to understand our stance on the cbam. What is our exposure currently on the European side and any strategy which we are going to tackle in terms of the whatever export which we are doing to the Europe.
Arun Maheshwari
Hi, I am Ahrun Maheshwari. Per se. Europe CBAM has impacted overall the entire exports happening. So it is not that it is impacting as JSW alone or India alone. However the impact is not.
operator
Pardon me. Sorry to interrupt sir, may we request you to please come a little closer to the mic when you’re speaking. Sir.
Arun Maheshwari
Sorry. It’s better now.
operator
Yes, this is better.
Arun Maheshwari
Yeah.
operator
Please go ahead. Thank you.
Arun Maheshwari
Okay, so I would say that you know the CBAM impact is not in particular for India or jsw. It has been impacting all the exporters who have been going to Europe. The overall real time impact assessment is still yet to come out because it’s still very new. People are still understanding the impact. However, I would say our export has been quite a sizable component has been into Europe. But the way you know, because if the impact is to overall European exporters then it will find its own way how to, you know, export it out over there.
So I don’t think that it will be having a bigger impact on us as, as a company.
Vikas Singh
Are any figures which you wouldn’t like to put in terms of exposure in terms of tonic annual basis?
Arun Maheshwari
Not really. So I see basically we have been doing somewhere around 1.2, 1.3 million ton. Kind of export into Europe. But the way the markets are shaping up in other geographies also probably we can consumer tonnages over there. At the same time India market is also growing much faster. So if you see year on year our exports component in the overall sales has been dropping. So I don’t see that this will have a major impact on our sales follow into exports.
Arun Maheshwari
So from a percentage point of view, just to answer your questions, Europe as a percentage of our total exports is going down. Asia, Middle east, other countries are picking up. So therefore some part is already getting mitigated. We will understand the guidelines fully as, as and when they come and we’ll be able to give you maybe some more color as we go along. But some readjustment in the prices in Europe also is something which will take place. So let us understand the market once the full guidelines play out.
Vikas Singh
Sir, my second question pertains to our capex plan in Orissa. The 6,300 crore per million ton for a greenfield plant seems to be pretty low. So what actually this is at some of the downtrend plant probably is expanding more than that. So what differential thing we are doing are in this or there’s a scope or a risk of further enhancing this CAPEX as we progress.
Arun Maheshwari
So no, first of all you know I would just like to say that from a CAPEX point of view if you see our bpa, our Dolby plant expansion which we have just undertaken which is on is actually specific investment is even lower than this. This is slightly higher because of being a green plant. The other reason is that we are doing this plant in a modular fashion. So we already had announced the pellet plant and some enabling infrastructure before that. That is something which is happening parallelly. But even then if you look at the plant once this 31,600 crores also include some enabling infrastructure for phase two expansion.
So when you look at a 10 million ton expansion including the next phase I think our CAPEX cost will be further competitive. If you were to compare with others how we are able to do it I think over time that the project expertise which JSW has developed and we are able to do specific investments costs lower over time so there is no. Risk of overrunning in this capex as. Of now we don’t see.
Vikas Singh
So thank you sir. Thank you.
operator
Thank you. Our next question comes from the line of Pathi Jonsa from Anandrati. Please go ahead.
Parthiv Jhonsa
Thank you for the opportunity. I hope I’m so my first question is pertaining to the capex. You know you have, you know mark almost what a lakh crore in next four to five years coupled with this 80,000 kind of a net debt and as mentioned earlier on the call you expect the CAPEX to be high in the first couple of years. Do you think that this will load your balance sheets despite receiving the money from bpsl?
Jayant Acharya
No, we do not think it will load our balance sheet. I think from a ratio point of view we will remain financially prudent while we invest. And from our perspective I think we are quite well placed to be able to manage these expansions while we keep our ratios in control. You will see the additional volume from BF3, the full ramp up of JVML, the new capacities from Dolby which will come in in phase three. All these will generate additional cash flows which will contribute to the internal accruals which we’ll be able to spend for the CapEx so from that perspective we are fine.
We don’t see any challenge.
Jayant Acharya
No, we definitely do agree that just. To add to this BPSL transaction once it’s concluded would also add significant new cash which you have to take into account while plotting the numbers. We do agree that you know, receiving BPSL would definitely help, you know, in the next couple of quarters but then Dolly is still down the line and plus we have taken up additional 5 million ton, you know, Capex. So just want to. And plus, you know, you have just mentioned a couple of minutes back that in the first two years the debt as in the Capex will be much higher. So assuming it’s about 25 30,000 odd crores which is basically net off against what you receive it from BPSL in the immediate term, do you think that this 80,000 crore of net debt can go to say 1 lakh or is there any threshold, you know, leverage what you expect?
Arun Maheshwari
No.
Jayant Acharya
So we are right now below 3 net debt to EBITDA. We reported 2.91. If you look at 100,000 crore on its totality over 5 years, 4 to 5 years, we are talking about 20, 25,000 crore. In certain year it can go up, certain years it will come down. Which is not very different from the capex we have been historically doing. You add VPSL cash in the mix and you will realize that perhaps it’s not as big a problem as it looks like.
Parthiv Jhonsa
All right, all right, thanks for the clarity, sir. Yes, my next question is again on Europe front.
operator
We request you to please rejoin the queue if you have any further questions.
Parthiv Jhonsa
That’s just the first question.
operator
Yeah, please go ahead.
Parthiv Jhonsa
Considering you know you export 11% volumes, you know, and like mentioned about 1 point to 1.3 million ton goes Europe, you know, considering CBAM. I know there are a lot of noise around CBAM but have you given a thought by internal calculation based on your emission norms, what is the impact on a pertinent basis? Is there a number which you have finalized?
Jayant Acharya
No. So we basically from, from a standpoint of, you know, exports, I would basically request you not to take right now any numbers because one is that the domestic demand is going up. If I were to look at incrementally this year we are expected to add about 11 million tonnes in India roughly. We will close at about 163 million tons of demand next year. Even if you were to look at a growth at about roughly 8%, we will be 176 million tonnes. This incremental demand which is being created in India we feel that this will provide ample opportunity for us to be using our capacities within the country.
The need for exports will gradually also reduce. Therefore the export moderation will happen in general and that we will basically take a call which area to reduce. With respect to your question on CBAM calculation, I think those are in process. I wouldn’t like to give you any number right now because we haven’t really finalized anything at this stage.
Parthiv Jhonsa
But at the. As for the latest circular, it is just purely based on scope one. Right. If I’m not mistaken or even because they are based on direct emissions if I’m not mistaken.
Parthiv Jhonsa
Right. Is the understanding correct?
Jayant Acharya
Yes, but yeah. So there are different technologies, different numbers, asset to asset. There is a difference. So my emission level in Vijayanagar will be different from Dolby level. So that’s why I’m saying that there are different moving parts. So let us wait for some more clarity once we do it.
Parthiv Jhonsa
Yeah, sounds good. Thank you so much for the opportunity.
Parthiv Jhonsa
Thank you. And best of luck.
Jayant Acharya
Thank you.
operator
Thank you. Our next question comes from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi. Thank you. Just. I know too many questions on cbam. Just one more question on this. Has there has been a two year transition period. So just wanted to confirm because one other company mentioned this that none of the Indian companies have got their emissions verified as of now. Just clarifying. There has been no verifier identified. Have you not. Have you or have you not got emissions verified so far? And is there still ambiguity whether the verified emissions will be for a company group level or will they allow plant specific emissions? Just, just a clarity on this?
Jayant Acharya
No, we. We are in the process of getting the verifications done. The CBAM will be asset wise. So basically it will be location plant wise, not for the company as one.
Satyadeep Jain
Okay. And how long will this verification process, when do you expect this to get done?
Jayant Acharya
Little gradually. I think the any exports which happen today in the year 26 will basically be. You know, you’ll have to give them a certificate after the end of the year. The importer will have to look at it and take a certificate from a verified source which we will be able to provide to them. And based on that the importers on record will have to pay the CBAM differential, whatever at that point time. So that will happen sometime in the beginning of 27 for the year 26.
Satyadeep Jain
Fair enough. And secondly on the capex, just on the Dolby first of all can you remind us how much you spent so far? I Think initial expectation for this was about 19, 20,000. Just wanted to see what have you spent so far, how much is left and when you look at ODISHA in the configuration, how much cpp? When you look at power sourcing, how much captive are you looking at? Because you’re also looking at increasing renewable penetration whrs in captive configuration for the new 5 minute ton.
Jayant Acharya
So on Dolby we are on track. I would not be able to give you figures exactly how much we have spent right now. But we are on track for our expenditure. The total cost of the project including some additional CapEx which we had declared during the last board meetings I think is close to 20,000, 800, 20,900 crores. We are on track for that expansion. Orissa, you are asking with respect to the power.
Arun Maheshwari
Correct. So we would be putting up capacity for power which we would require. In addition to that we would be buying something from the grid. So it’s a combination which we would be doing. But let’s say that some major part will be from our own captive and some will be drawn from the grid and other sources.
Satyadeep Jain
How much, how much megawatt of capacity will you be setting up for this 5 million ton on your own? 31,600 includes how much captive power plant.
Jayant Acharya
Yeah, we have that detail. We can give it to you.
Satyadeep Jain
Okay, thank you.
Jayant Acharya
It’s about 340, 50 megawatt. But we’ll give it to you.
operator
Thank you. Our next question is from the line of Ritesh Shah from investech. Please go ahead.
Ritesh Shah
Yeah. Hi sir. Thanks for the opportunity. So three questions. First is sir, overall on capital allocation, where does the 51% stake in JSW Realty? And I think with respect to Saffron Resources it does indicate there’s a land bank. Where do these variables fit in the overall scheme of things? That’s one. Second question is on safeguards. How do you see the risk of circumventions and potentially higher volumes from Japan and Korea limiting our ability to raise prices? If you could highlight some numbers on parity map that would be great. And third question is we have two blocks, correct me if I’m wrong over here, Ajdao and Surja Gad in Maharashtra.
What are our plans over here? And is there any probability of MSMC granting any leases to any company on linkage basis or something which can potentially reduce the cost curve for any company? Those are three questions. Thank you.
Jayant Acharya
So Ritesh. So I’m here. I’ll take the first question and thanks for asking. Our capital allocation principles remain intact. Capital goes to what is core to us which is steel making. Saffron land acquisition is earmarked for a potential steel facility in future and there will be no other use for that on the KSW realty deal. I mean we have not spelled out the details but what we require is essentially office space as we are expanding as company and what we will get out of this is a very lucrative return in terms of cost invested in an office space.
This is, this is our whole intention of being in that deal. And there is nothing more to that.
Ritesh Shah
Second question was on safeguards. Yes sir. Effectiveness of safeguards risk on circumvention imports probably from Japan and Korea restricting our ability to increase prices.
Jayant Acharya
Yeah, no, I. The safeguard is certainly, you know, even if you look at Japan and Korea, 12% safeguard is certainly very helpful. We expect that to limit unfair trade to a large extent. It still allows us scope to increase the price. And along with depreciation of the currency, I think it leaves room for some price improvement during February and March. So that’s something which we will see. Also keep in mind that the prices in India fell actually more it came to a discount versus imports. So that’s something which anyway has to come back to a sensible level from the iron ore point of view.
I think I’ll request Arun to respond on Maharashtra and Sujagar.
Arun Maheshwari
So anyway, we have concession available with us which we are exploring all the ways to how do we make it operationalized in the coming years. So the work is on for that.
Ritesh Shah
And the last question, sir. Any probability of state government granting out leases on linkage basis, anything of that sort where in Maharashtra?
Jayant Acharya
No, nothing to our knowledge as of now. Nothing so far.
Ritesh Shah
Sure, this is helpful. Thank you so much. Thank you.
operator
Thank you. Our next question comes from the line of Rashid Chopra from Citigroup. Please go ahead.
Raashi Chopra
Thank you. You already addressed some of the pricing question. But effectively in this quarter what was the realization change that you witnessed without the mix impact?
Jayant Acharya
There was a drop in realization in this quarter. I think the market. If you were to look at the market price, for example, if I were to take an example of a hot roll coil, the market dropped quarter on quarter by about 2,200 rupees per tonne. We as a blend were able to reduce the impact of this through value added mix which we have. You know, our value added mix was the ever highest as I mentioned. So our drop was close to 1400 odd rupees per ton on the overall mix of JSWST drop.
Raashi Chopra
Understood. And as of now the Increase that you mentioned in December and January is about 3500 with further scope for upside.
Jayant Acharya
Yeah, yeah. 1500 odd I think in December and about 2000 odd in January.
Raashi Chopra
Got it. And on the cost side, like you already paid iron ore as well as the coking cost, but on a blended basis, how did the costs move sequentially?
Jayant Acharya
Sequentially from quarter 2 to quarter 3? Yes, quarter 2 to quarter 3. As we said, $5 on account of the price. There was an impact of coking coal. There was some related cost related to the shutdown of BF3 which came in. And there were some shutdowns in Salem which came in. So from a cost perspective, we had an impact close to 500 to 600 rupees per ton.
Raashi Chopra
And what was your captive Iono proportion.
Jayant Acharya
Last quarter? I think 33%.
Raashi Chopra
Okay, thank you.
operator
Thank you. Our next question is from the line of Ashish Jain from Macquarie India. Please go ahead.
Ashish Jain
Hi sir. Good evening. So first question is, you know, on the Orissa expansion, given the location, are we planning to do from a technology wise or otherwise, you know, to be export compliant and low carbon, or is it like does the standard mill we set up without focus on India market.
Jayant Acharya
So the location is very conducive for exports primarily because we are on the port and we would be looking at the product mix would be tailored to look at some of the export requirements as well from a renewable energy or from gas utilization point of view to reduce the carbon emissions. I think those discussions are ongoing. We are trying to see if we are able to get in some gas and reduce the. Yeah, whatever. The best available technologies which are available will be used, including the blast furnace. So today the technologies and blast furnaces have also got very advanced in terms of oxygen injection or other cocoon gas usage or the other one which we have used just now in root, what was that? Dehumidification.
These are essentially reducing your carbon footprint. We are going to be using all available technologies, even in the blast furnace to reduce the normal level which a blast furnace has.
Ashish Jain
Right, right. And sir, also, you know, given, you know, Dolby location wise is much. Hello?
Ashish Jain
Yes, sir.
Jayant Acharya
So given, you know, Dolby location wise is, you know, more conducive to, you know, export to the West. The latest line we are setting up, will it have materially lower carbon emission again from a technology point of view and does it make it easier for us once Dolby ramps up to access some of these Europe, some of the export markets.
Ashish Jain
Talking about Dolby, you see, any new addition is coming up with the Latest of the technologies in the blast panel. So definitely the carbon emission in the new production line will be slightly better than the existing ones. There’s absolutely no doubt our best for.
Jayant Acharya
Blast furnace also same the best. See the the phase three which is being there at door. We will also have a blast furnace with all the best available technology. What was being explained for Paradi. So overall blast furness will have a less emission in terms of you know gases. So and then this is csp. So overall energy spent for you know production will be quite low. So our asset at Dolby emissions are lower than normally other locations. That is one second thing I think when you’re looking at supplies to Europe or you’re looking at low emission supplies we have already communicated to you that we are looking at an asset for green steel or low emission steel through the electric arc furnace natural gas renewable energy route at Salao which will take care of the requirement for anybody who has low emission carbon requirement.
Kirtan Mehta
Okay. Okay. Got it sir. Thank you so much.
operator
Thank you. Our next question comes from the line of Kirtan Mehta from Baroda BNP Pariba Mutual fund. Please go ahead.
Kirtan Mehta
Thank you sir for the opportunity. One more follow up on the cbam. Basically the way you said is our emission will get certified till end of Cal FY27 or so. So in the meanwhile would we be willing to sort of do the exports assuming the emissions at our end or sort of give a guarantee to buyer to compensate for the impact. How would it transpire during the period when the emissions are not certified? Basically no.
Jayant Acharya
One thing we almost know about it that CBAM impact is overall for everyone similar impact. So Europe will. Prices in Europe will go up to that extent of the CBAM impact anyway. So while we are still assessing what would be the real impact of the CBAM while it is the policies are still being understood by everyone by the importers as well as exporters. So eventually Europe will remain a market for the people despite having CBAM because overall cost in Europe will go up. So this is where we look at it. We are waiting for this entire policy coming out in understanding and thereafter we will take a call on that.
Kirtan Mehta
Okay. Second question was regarding the Odisha plant. Have we also finalized the downstream plan for the product or would we be announcing that separately beyond this CAPEX of.
Jayant Acharya
31,600 crores as of now this is up to the hot strip mill. We are not yet announced any downstream plan at Odisha. Currently what we have announced is the downstream plant in the north of India which we have mentioned about tinplate and galvanized. And galvanized capabilities for our color coded lines. We will look at the Orissa downstream at a later stage.
Kirtan Mehta
Sure. Sir, just one last question if I can include. We also had a plan for couple of EAFs. So is that getting shifted with the announcement of this plan?
Jayant Acharya
The Kadappa project which basically is an electric arc furnace project is we just announced last quarter that has capacity to expand as well if we require. But keep in mind that electric arc furnaces in India doesn’t have really scrap. So electric arc furnaces depends on scrap or on high grade DRI which basically relies on imported iron ore. So you effectively have to do some mix which is viable from an India standpoint. But what we are doing at Salao is again going to be electric arc furnace based dri based production kadaka also it’s electric arc furnace based 1 million and we already have electric arc furnaces currently operating at various locations.
Kirtan Mehta
Right sir, understood. Thank you.
operator
Thank you. Our next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, thanks for the follow up. I wanted your outlook on iron ore. So this year if you see imports have increased and we’ve also imported wanted to know is it strategic or is it some quality issue? And also when we look at 50% being met through captive for the remaining 50% over the next five, six years, are we seeing domestic availability or there should there might be some shortages which will have to be then imported.
Jayant Acharya
So iron ore import is largely because of grade availability in India is very poor. It is going down every year. So that is why we had gone for a higher grade of imports of iron ore. So it is a more of a combination requirement in the production usage. At the same time availability of iron ore in different geographies are different. So we have to consider that while we take our buying decisions. So it may not remain uniform every year but whenever we see this opportunity coming up we would like to shift our security base accordingly.
Sumangal Nevatia
It’s basically for blending for especially larger blast furnaces which require some improved grades and we’ll continue to look at it and take the call.
Sumangal Nevatia
Mr. Acharya, what is our medium term view is there for the remaining 50% which is market for us over the next five years will we have enough domestic iron ore or you see a domestic shortage increasing over years?
Jayant Acharya
No, I don’t think so.
Jayant Acharya
Yeah, I think the government is also having a lot of, you know, policy intervention coming in and they are ensuring that the iron ore availability is not compromised in line with the nation’s hill policy, what they are targeting. So iron ore availability will be maintained with all the initiatives, what even government is taking and the way the private miners are also trying to increase their capacity or production.
Arun Maheshwari
So new mines will also come up for auction apart from unlocking mines which have been held up due to various reasons. So we do not envisage shortage in India as we go along. But we may have to put facilities for beneficiation or value addition into pellets as the case may be. But yes, we have ample resources in India. So from an availability point of view, we don’t see a concern.
Sumangal Nevatia
Got it. Thank you and all the best.
Jayant Acharya
Thank you.
operator
Thank you. We have no further questions. Ladies and gentlemen, I would now like to hand the conference over to the management for closing comments. Over to you sirs.
Jayant Acharya
So thank you very much for the time. Just to reiterate that we look forward to a good quarter 4 stronger volumes based on a seasonally strong demand. In quarter four margins are likely to be better with prices recovering and offsetting some of the raw material price. I think from the next year’s perspective the BF3 will be up and running from April onwards and and we will be well positioned to meet the requirements in India from next year onwards. Our capacity in India will be close to 36 million ton after the BF3 expansion is finished. Thank you and all the best.
Thank you everyone. Please reach out to us if you have any further questions. Bye bye.
operator
Thank you on behalf of JSW Steel limited that concludes this conference. Thank you all for joining us. You may now disconnect your lines.