JINDALSTEL

: Strong Q1 Profitability Despite Lower Volumes

reported a robust Q1 FY26, with consolidated Ebitda increasing by 6% year-on-year (y-o-y) to ₹3,000 crore, even as volumes dropped by 9%. This was primarily driven by a 16% rise in Ebitda per tonne to ₹15,680, thanks to a sharp reduction in raw material costs. Financial Performance: Despite lower volumes, revenue only fell by 10% to ₹12,300 crore, as average realizations saw a sequential increase of 4.5% to ₹64,700 per tonne. The company expects weaker steel prices in Q2, but believes this will be offset by lower coking coal costs, limiting the impact on profitability. Expansion and Growth: The company is focused on its ongoing expansion projects. It commissioned a continuous galvanizing line and an oxygen plant in Q1, and a new 4.6 mtpa blast furnace is slated for commissioning in Q2. A significant milestone in Q2 is the commissioning of the Utkal B1 coal block, which will allow for 100% captive sourcing of coal, further improving cost efficiency. Management has guided for FY26 sales volumes of 8.5-9 million tonnes (mt), with about 1 mt from the new capacity. This points to a potential 19% CAGR in volumes between FY25 and FY27. Financial Health: The company has spent over ₹28,000 crore of its planned ₹47,000 crore capex, budgeting another ₹9,600 crore for FY26. Working capital needs pushed the net debt-to-Ebitda ratio to 1.49x in Q1, but the management is committed to keeping it below a cap of 1.5x. Valuation: The stock is up 5.5%. Its future trajectory will hinge on post-monsoon steel prices and the swiftness of new capacity ramp-ups.