JSW Steel Q2 FY27 Earnings Call: Capex Raised to Rs. 1.48 Lakh Cr, Gross Debt Cut Over Rs. 29,000 Cr (JSWSTEEL)

JSW Steel Ltd held its Q2 FY27 earnings call on October 23, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Volumes Anchor a Solid Quarter, With Price Softness Beneath

• Record crude steel production of 7.27 MT (+5% YoY) and consolidated production of 7.07 MT; consolidated sales of 7.46 MT (+13% YoY) with record domestic sales of 6.29 MT (+12%).
• Consolidated revenue of Rs.54,486 Cr, adjusted EBITDA of Rs.9,941 Cr (18% margin) and PAT of Rs.5,359 Cr in Q2 FY 2026-2027.
• Value-added and special products sales of 4.11 MT (+11% YoY); auto sales +36%, appliances +28%, institutional +15%, renewables +14% YoY.
• Vijayanagar BF3 reached ~90% utilization, with India operations overall at ~88% in Q2 FY 2026-2027.
• Coking coal costs rose ~$10/ton — below the earlier $12-15/ton guidance — while realizations fell QoQ, mainly on long steel prices.
• Overseas: US operations EBITDA ~$19 million (Ohio vacuum tank degasser commissioned; September maintenance/plate mill shutdowns); Italian rail mill EBITDA $7 million, flat vs Q1 FY 2026-2027.

Monsoon-Driven Price Dip Reversing; H2 FY27 Expected Strong

• India steel consumption grew 7% YoY in Q2 FY 2026-2027 and 7.5% in H1; management expects domestic steel demand to grow 7-8% in FY27. India was a net finished-steel importer in H1.
• Long steel prices fell sharply during the monsoon, exacerbated by the Middle East crisis and labor availability issues; recovery followed as construction picked up, aided by strong Government of India public capex in June–July (Q1–Q2 FY 2026-2027).
• October price increases will be fully reflected in Q3 FY 2026-2027 (October–December quarter); hot-rolled prices corrected less sharply than longs and have recovered from the interim Q2 drop.
• Management expects continued long steel demand growth in H2 FY 2026-2027, especially after the festivities, on public capex and now-improving private capex.
• Domestic iron ore supply has not grown in line with demand over the past one-two quarters; an NMDC Chhattisgarh mine derailment disrupted supply for almost 20-25 days. Jayant Acharya expects a softer iron ore environment over the next few quarters (Q3 FY 2026-2027 onwards) as post-monsoon bottlenecks ease.
• Macro tailwinds cited: IMF upgraded global growth to 3.1% for 2026 (3.4% for 2027); IMF and RBI upgraded India's FY27 GDP growth to 7% and 7.1% respectively. RBI recently hiked policy rates and adopted a hawkish stance amid elevated energy prices and inflation risks.

Capex Raised to Rs.1.48 Lakh Cr on the Path to 78 MT by 2032

• Capex plan raised from Rs.1.3 lakh crore to Rs.1.48 lakh crore, to be spent over the next 5-6 years, largely funded from internal accruals; steady progress toward the goal of 78 MT India capacity by 2032 including JVs.
• H1 FY 2026-2027 capex of Rs.11,136 Cr, with FY 2026-2027 guidance of Rs.22,000-24,000 Cr on track.
• New board approvals: Utkal Phase 2 of 5 MT (Odisha capacity to 10 MT; Phase 1 expected by Q3 FY30, Phase 2 by Q1 FY31); 8 MT pellet plant at Vijayanagar plus converter/caster to lift Vijayanagar crude steel to 25 MT; Dolvi Phase 3 upgrading the CSP mill to 7 MT; Vasind CRM complex of 1.8 MTPA expected by Q2 FY30.
• JJSL (JSW-JFE JV) partners approved a 5 MTPA expansion to 9.5 MT total capacity, planned commissioning by FY31; Q2 sales of 0.92 MT and EBITDA of Rs.1,136 Cr.
• Execution across four simultaneous blast furnace/steel sites (five including Kadapa) — described as unprecedented in India — is supported by contractor redeployment (BF5 team shifted to BF6) and trained supervision from Dolvi and Vijayanagar; Dolvi completion expected in FY 2027-2028.
• Downstream build-out underway in response to analyst concern on ~26 MT of crude additions without commensurate downstream: electrical steel at Vijayanagar, CRGO JVs for Nasik and Vijayanagar, Vasind, Khapoli and Rajpura; more downstream capacity expected in subsequent quarters (FY unspecified).
• Currency risk to capex dismissed — CFO Swayam Saurabh said INR-announced capex costs already factor in normative rupee depreciation / forward cost coverage over the capex period.

Coking Coal Headwind Priced In; Captive Iron Ore and Coal Build-Out

• Coking coal guided up ~$25/tonne in Q3 FY 2026-2027, already factored into plans; prices are elevated near $270/tonne (analyst-cited) on mining accidents in China and Mongolia's inability to ship cargoes to China. Arun Maheshwari stressed the elevation is industry-wide, applying to the entire global steel industry; an analyst flagged upcoming Australian cyclones as an H2 FY27 risk.
• Coking coal security: Mozambique hard coking coal capacity being scaled to 9 million tons (period unspecified); Illawara already provides 2 million tons; domestic coking coal targeted at ~3.5 million tons (period unspecified) — together ~15 million tons of captive linkage (period unspecified), which management said covers most PLB coal requirement up to the end of this decade.
• Iron ore: 25 mines in the portfolio, 13 operational; EC capacities across operational mines ~42 million tonnes, with captive mines under development expected to cover up to 50% of today's requirement level (period unspecified).
• Raw material capex approved for ~9 MT of clean prime hard coking coal at the MDR mine, Mozambique (acquired March 2026), with production to commence CY2028; three Karnataka iron ore mines expected in Q4 FY27 adding ~4 MT (Karnataka total ~15 MTPA); Parbatpur and Dugda washeries being readied for FY 2027-2028 for ~3.5 MTPA clean coking coal.
• Cost levers: new larger-volume blast furnaces offer better productivity, lower fuel rate and less manpower; washeries and increased domestic coking coal blending are being added to partially offset imported coal costs.
• Renewables: over 1,000 MW commissioned as of Q2 FY 2026-2027; the balance 1.5 GW, already approved, is in process of commissioning, taking JSW to 2.5 GW+ of RE capacity (period unspecified).
• Safeguard duty scenario: if safeguard duties are not renewed, management said these cost-structure measures — value-added downstream products, larger furnaces, raw material security and logistics savings — should shield JSW from import threats.

Deleveraging Underway; JV Ring-Fencing Reiterated

• Gross debt reduced by more than Rs.29,000 crores during H1 FY 2026-2027, with expensive dollar-denominated debt paid out; dollar debt exposure declined from over $6 billion at the start of FY 2026-2027 to ~$3.5-3.6 billion as of the Q2 call.
• A $500 million bond was repaid in October 2026 (Q3 FY 2026-2027), ahead of its April 2027 (Q1 FY 2027-2028) due date, using the contractual option available.
• Net debt of Rs.44,482 Cr and net debt-to-EBITDA of 1.28x as of Q2 FY 2026-2027, giving room to temporarily increase debt to bridge any temporary cash gap.
• Free cash generation sustained despite capex: in Q2 FY 2026-2027, despite nearly Rs.6,500 Cr of capex, the company generated free cash and reduced debt; CFO expects ~Rs.25,000-30,000 Cr a year of cash generation (period unspecified) to largely self-fund capex, while noting prices and EBITDA margins could come down.
• JJSL took a Rs.276 crores stamp duty impact in Q2 FY 2026-2027, recognized on a best-estimate basis (CFO Swayam Saurabh); PAT was a loss due to the provision on the bpsL transaction, positive excluding it.
• Ring-fencing confirmed: CFO said JSW Steel has been ring-fenced by design from the Sambalpur JV's liabilities and believes that protection will remain intact; management does not believe net debt/EBITDA will reach 10x, though leverage could go slightly higher during the project phase (period unspecified). BPSL JV net debt as of September 2026 was not disclosed; IR to provide one-on-one.

Q3 Volume Uplift, FY32 Capex Ambition and the 2047 Policy Backdrop

• Q3 FY 2026-2027 volumes expected to rise on full production from Vijayanagar BF3 and JVML; coking coal costs expected up ~$25/ton and iron ore marginally higher; company on track to meet FY 2026-2027 production and sales guidance.
• Management expects to offset Q3 FY 2026-2027 cost increases (coking coal, iron ore, zinc, tin, ferroalloys) and add incrementally to margin over Q2 FY 2026-2027. Auto sector Q3 negotiations ongoing with no indicator offered; Q2 negotiations are closed.
• Balance sheet strength cited to fast-track capex in line with FY32 guidance; management remains very confident on India growth with H2 FY 2026-2027 expected to be very strong, and very optimistic on growth for this decade in India (no specific numeric target given).
• Government's draft National Steel Policy 2047 — management cited the draft policy envisioning India steel consumption of 505 MT, capacity of 600 MT and production of 530 MT by 2047; Jayant Acharya cited "draft new national policy by 2047 forecasting steel demand of 500 million tons and capacity of 600 million tons" as directionally requiring capacities to be set up in India.
• Per capita consumption gap as structural driver: India at 116 kg vs ~210 kg global average, projected at ~300 kg by 2047 (per the draft policy context cited on the call).
• Product strategy as capacity scales to 50 and eventually 78 (period unspecified): double-digit downstream value-added demand growth seen (period unspecified); specialty steel (CRNO, electrical, transformer steel, CRGO) to benefit from electrification; tin plate capacity added for sustainable packaging; bearing steel capacities at Salem debottlenecked; BMM asset to add alloy/long steel and the Raigad rail mill adds a value-added offering.
• Sustainability: net carbon neutral by 2050 goal; Khapoli 0.5 MT scrap center baler commissioned in Q2 FY 2026-2027 with shredder by end Q3 FY 2026-2027; H1 FY27 scrap utilization up more than 10% YoY; 134 electric buses and 98 electric cars deployed across Vijayanagar, Dolvi and Salem.