JSW Steel eyes strong H2 as domestic demand and policy support bolster outlook

After reporting strong numbers for the second quarter despite the challenging global environment, JSW Steel said the company expects the second half to be strong, thanks to 8-9% growth in domestic steel demand in FY26.

In a post-earnings interaction with analysts, Jayant Acharya, joint managing director and chief executive officer (CEO) of JSW Steel, said: “While exports need to be monitored due to tariffs by various countries, we remain optimistic for a strong second half, supported by improving steel prices and higher production volumes.”

India’s largest steelmaker by domestic capacity on Friday reported a more than three-fold jump in consolidated net profit for the September quarter, thanks to higher volumes and lower input costs offsetting weak metal prices.

The company announced consolidated net profit ₹There was a sharp increase in the quarter ending September 30, 2025 at ₹1,623 crore. ₹439 crore a year ago. He still missed ₹1,766 crore estimate by 23 analysts surveyed Bloomberg.

Acharya acknowledged that prices were softer in the seasonally weak quarter, but predicted better times ahead. “We have seen prices stabilizing since September following the monsoon and we expect them to improve in November-December,” he said.

Revenue from operations increased by 14% ₹Adjusted EBITDA increased 39% to 45,152 crore ₹7,849 crore, “partially offset by a decline in realizations primarily due to higher volumes and lower iron ore, coking coal and energy costs,” the steelmaker said on Friday.

Reported EBITDA increased by 30% ₹7,115 crore, excluding forex and intercompany adjustments. EBITDA refers to earnings before interest, taxes, depreciation and amortization.

Elara Capital metals and mining analyst Ravi Sodah said the company’s second-quarter results met expectations, with an increase in sales volumes helping offset weak prices and supporting earnings.

The steelmaker’s sales also increased by 20% to 7.34 million tons compared to the same period of the previous year, and capacity utilization in India was 92%. Additionally, exports increased 89% year-on-year and contributed 10% to sales from India operations in the second quarter.

In the second quarter of the financial year, the company produced 7.90 million tonnes of crude steel, an increase of 17% compared to last year. This growth was driven by the expansions of JSW Vijayanagar Metallics Limited and Bhushan Power and Steel Ltd, as well as the Dolvi plant operating at full capacity following its scheduled maintenance in the first quarter.

The company’s consolidated capital expenditure expenditure in the second quarter of FY26 was as follows: ₹3,135 crore and ₹6,535 crore in the first half of FY26. waiting to spend ₹20,000 crore for the entire financial year.

Acharya added that JSW Steel is expected to reach a capacity of 41.9 million tonnes by FY27 and production will increase to 42.9 million tonnes with the addition of the 1 MTPA electric arc furnace plant in Kadapa, Andhra Pradesh, which is scheduled to be completed by the end of FY29. The company has a capacity target of 50 million tons by 2030.

Shares of the steelmaker on BSE fell marginally by 0.77%. ₹1,162.80 on Friday.

Export, import and policy context

According to Elara Capital’s October report, since the start of FY26, China’s HRC prices have increased by 4.5% in rupee terms, while domestic prices have fallen by 5% despite the 12% safeguard duty. China’s hot rolled coil prices serve as a leading indicator for global steel prices.

The temporary protection tax, introduced in April to protect local producers from cheap Chinese imports, is expected to expire this month.

Acharya said the finance ministry’s approval for the three-year guard mission is expected by November. The Directorate General of Trade Remedies (DGTR) has proposed a gradual rate for imports of hot-rolled flat products of unalloyed and other alloy steel, 12% for the first year, 11.5% for the second year and 11% for the third year.

Acharya emphasized that while imports have fallen on an absolute basis, they have increased again in the last two months due to tariff fluctuations that have caused some spillover to market-seeking steel, “and India has become a natural choice.”

“While our 12% safeguard duties in the first quarter were helpful, I think some of that has already been eroded,” he added.

The company said domestic economic momentum remains “generally positive” while it remains cautious about the global outlook for 2026, given ongoing geopolitical uncertainty and higher tariffs although some recent trade deals have eased the pressure.

The recent GST reforms are expected to drive a significant increase in consumption, especially in segments such as automobiles and consumer durables. The company said second-quarter trends were impacted by delayed purchases ahead of the GST rate revision, but “demand is expected to recover strongly in the second half.”

Regarding the carbon tax in Europe, Acharya said the company is following CBAM policies but detailed guidelines are still awaited. He emphasized that more than 90% of the company’s volumes are in the domestic market, which has helped soften its export focus.

“Our exposure in Europe is limited to around 2-3% of the 30-32 million tonnes capacity, so we must be able to find alternative markets for these volumes,” he said. “But we will continue to closely monitor how CBAM and the proposed European mission structure evolve.”

Additionally, JSW Steel said it is streamlining its operations in the US by consolidating all its operations under a single holding company, JSW Steel (Netherlands) BV, pending regulatory approvals. This consolidation of the Baytown and Acero business units is expected to increase both financial and operational efficiency.