JSW Steel Q3 profit jumps nearly threefold aided by one-time gain

Mumbai: JSW Steel, India’s largest steelmaker in terms of domestic capacity, reported an almost three-fold increase in net profit in the December quarter, driven by a one-off tax benefit.

The company announced consolidated net profit ₹2,139 crore in the quarter ended December 31, 2025, a sharp increase compared to the previous period. ₹717 crore a year ago. Profit exceeded the record ₹1,406.7 crore is the estimate of 13 analysts surveyed by Bloomberg.

Reported profit includes a one-time deferred tax gain. ₹1,439 crore is related to this Bhushan Power and Steel entities. Apart from this, the underlying profit is approximately ₹700 crore, roughly half of analyst expectations, down 2% from the same quarter in the previous year.

In a post-earnings interaction with analysts, Jayant Acharya, joint managing director and chief executive officer (CEO) of JSW Steel, said that steel prices are at their lowest level in recent years, negatively impacting realizations. “Coking coal costs increased by $1.05 in line with our guidance, while iron ore provided a slight cost advantage due to better blends,” he said.

JSW Steel said in its statement: new labor laws led to the recognition of a one-off exceptional fee ₹529 crore consolidated towards higher employee benefit liabilities.

Mumbai-based company reports 11% increase in revenue from operations ₹45,991 crore compared to the same period a year ago. The company’s adjusted EBITDA increased by 22% compared to the same period of the previous year, remaining in February: ₹6,620 crore and the EBITDA margin was 14.4%. Adjusted EBITDA growth was driven primarily by higher volumes and lower coking coal and energy costs, partially offset by lower realizations. When reporting EBITDA ₹6,496 crore during the quarter.

Adjusted EBITDA excludes unrealized foreign exchange gains and losses from long-term borrowings, while unrealized foreign exchange gains and losses from intercompany receivables are excluded.

“Net profit increased sharply, but most of the increase was due to one-off gain from Bhushan Steel’s deferred tax assets,” said Mohd Sheikh Sahil, associate analyst for metals and mining at IDBI Capital Research.

JSW Steel’s domestic sales stood at 6.59 million tonnes and exports increased by 53% to 0.84 million tonnes compared to the same quarter of the previous year. Exports contributed 11% to sales from India operations in the quarter.

The company also approved a 50:50 joint venture with JFE Steel, Japan and transferred the steel business of Bhushan Power and Steel to JSW Sambalpur Steel through flash sale for 2018. ₹24,483 crore as on January 20, 2026, with the approval of the Competition Commission of India (CCI). The transaction is expected to generate significant capital gains by promoting the recognition of a one-time deferred tax asset. ₹1,439 crore from previously unrecognized unabsorbed depreciation. This non-recurring tax credit increases reported profit but does not affect underlying earnings.

Unabsorbed depreciation represents prior years’ depreciation that cannot be offset against taxable income. Under Indian law, it can be transferred indefinitely and used against future taxable income, including capital gains. In this case, upcoming capital gains increase the likelihood of use.

“Weakness in the December quarter was largely due to very low steel prices, which put pressure on realizations. High material and personnel costs on a quarterly basis further pressured margins even as energy and fuel costs fell. Both coking coal and iron ore contributed to the increase in material costs,” IDBI’s Sahil said.

In November, prices of steel used in automobiles and home appliances in India fell to a nine-month low, while prices of steel used in construction and infrastructure fell to an almost five-year low. The decline was due to oversupply and weak demand in major infrastructure projects. The expiration of the temporary protection measure tax on November 7 and the lack of clarity on whether it will be extended until the end of December further weakened confidence.

Prices stabilized after the Union government announced 12% safeguard duty for three years on December 30, giving steelmakers the confidence to raise prices twice within two weeks of the announcement.

JSW Steel said its board of directors has approved setting up of 5 million tonnes per annum (MTPA) steel plant at a new plant in Odisha’s Jagatsinghpur. The project will be executed through its subsidiary JSW Utkal Steel Ltd and ₹31,600 crore, with a target to be commissioned in FY30. This is the first phase of the project, which includes the scope of increasing the capacity at the site to 13.2 MTPA.

Acharya said JSW Steel’s 5 MTPA Odisha project is “very conducive for exports” and the company will try to tailor its product mix as per some export requirements.

In line with the steelmaker’s strategy to increase its post-production capacities to meet market requirements, the board approved 0.2 mtpa tin plate and 0.36 mtpa continuous galvanizing line at its existing after-sales facility in Rajpura, Punjab.

Downstream means processing steel to create value-added products rather than just selling it as raw steel. The tin plate unit produces tin-plated thin steel sheets used mainly for food cans and packaging, while the Continuous Galvanizing Line (CGL) coats the steel with zinc to prevent rust and is used in the appliances, construction and automotive industry.

JSW Steel’s consolidated capital expenditure expenditure in the 3rd quarter of FY26 was as follows: ₹3,482 crore and in the first nine months of FY26. ₹10,018 crore. The company expects to spend ₹15,000-16,000 crore in FY26.

India’s steel consumption continued to rise with a 9-month growth of around 7%. Looking ahead to FY27, demand is estimated to increase by 7-9%, Acharya said. “Q4 margin should be better, supported by seasonally strong demand and higher steel prices,” he added.

“Steel prices have started to move and have started to recover from multi-year lows in the last quarter. By the end of December we saw prices moving approx. ₹1,500 per ton. It became active around the beginning of January. ₹2,000 per ton. “As we move forward, we see the possibility of some recovery this quarter,” Acharya said.

The company also prepared a spending plan. ₹1 trillion in the next 4 to 5 years.

Regarding Europe’s carbon tax policy or Carbon Border Adjustment Mechanism (CBAM), JSW Group CEO Arun Maheshwari told analysts that the impact of the policy is not specific to India but applies to all exporters in Europe.

“The overall real-time impact assessment has not been done yet because this is still very new. People are still understanding the impact,” Maheshwari said, adding that they currently export around 1.2-1.3 million tonnes to Europe.

Acharya pointed out that Europe’s share in the company’s total exports has decreased.

The company is currently completing emissions certifications. These certifications will be carried out at the asset or facility level, not at the company level, in line with CBAM requirements. For exports made in the 2026 calendar year, emission certificates will need to be submitted after the end of the year.

The steel producer’s sales volumes also increased by 14% compared to the same period of the previous year, reaching 7.64 million tons; Capacity utilization in India, excluding Blast Furnace 3, was 93%.

Consolidated crude steel production rose 6% year-on-year to 7.48 million tonnes, supported by the ramp-up of the Vijayanagar Metallics project, but sequential production fell due to the closure of Blast Furnace-3 in Vijayanagar for capacity expansion.