Jindal Stainless Ltd (JSL) Q1 FY27 Earnings Call: Reaffirms 8-10% Volume Growth, EBITDA per Tonne Guidance Unchanged

Jindal Stainless Ltd held its Q1 FY27 earnings call on August 03, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Resilient Revenue Despite Gas Disruption

• Revenue +10.5% YoY, EBITDA +1.4% YoY, PAT +7.7% YoY — Q1 FY 2026-2027 consolidated performance despite industrial gas supply constraints and logistics uncertainties (Segment 5).
• Finished goods sales volume declined 7.3% YoY — driven by a gas crisis in early April 2026, partially offset by a shift to value-added product mix and thinner segments (Segment 5).
• Net debt reduced to Rs.2,950 Cr — with net debt/EBITDA at 0.53x and net debt/equity at 0.14x as of Q1 FY 2026-2027 (Segment 5).
• EBITDA per tonne guidance of Rs.18,000–Rs.20,000 — unchanged for H1 FY 2026-2027; management will revisit at end of Q2 (Segment 7).
• Grade mix: 200 series 35%, 300 series 47%, 400 series 18% — higher 300 proportion attributed to selective, bottom-line-focused sales approach, not a direct nickel-cost pass-through (Segment 13).
• Hisar facility cut GHG emission intensity 12% YoY — through energy-efficient upgrades (Segment 4).

Gas Crisis, Cost Spike, and Path to Normalization

• Government restrictions on propane/LPG — forced open-market purchases at up to 3x pre-war levels; dependence reduced by switching to piped natural gas (PNG) at Jajpur (Segment 7).
• Power & fuel costs at ~10–10.5% of revenue — declined 40–50% from the quarter's peak but remain above pre-war levels (Segment 13).
• Production returned to pre-war levels in Q1 FY 2026-2027 — driven by the shift to PNG, restoring flexibility and reducing imported LPG/propane dependence (Segment 14).
• Capacity utilization at end-Q1 was 69–70% — due to disruptions; expected to improve in Q2 FY 2026-2027 (Segment 12). The company was unable to pass on 100% of the gas price increase.
• Volume recovery expected to be gradual — over the next few quarters starting Q2 FY 2026-2027, with no immediate normalization (Segment 8).
• Scrap feed rates stable — Hisar at 85–90%, Jajpur at 70–75% in Q1 FY 2026-2027 (Segment 11).

Capacity Expansion, Indonesia Ramp, and Green Hydrogen

• Cold-rolled capacity target: 2.67 MTPA by FY 2027-2028 — up from 2 MTPA, with equipment additions at Jajpur, Kharagpur, and Hisar (Segments 9, 11).
• CAPEX for FY 2026-2027 guided at ~Rs.2,800 Cr — focused on value-added downstream products (Segment 9).
• HRAP plant (1.1 MTPA) expected ready around Q3 FY 2026-2027 — then ramp-up to rated capacity (Segment 12).
• Indonesia melt shop (1.2 MTPA) ramping at 40–50% — guided by partner's past performance to reach 70–80% within first year of operations (period unspecified) (Segment 15).
• Long-term volume target of 3.5 MTPA by FY 2028-2029 — unchanged (Segment 5).
• Green hydrogen: Jajpur 600 Nm³/h commissioning Aug 2026, additional 600 Nm³ in FY 2027-2028 — total hydrogen capex ~Rs.35 Cr at min 15% IRR; Hisar adding 200 Nm³ over next two quarters (Segment 16).
• Maharashtra greenfield clarity expected in 1–2 quarters — by Q2/Q3 FY 2026-2027, land acquisition in progress (Segment 9).

Domestic Strength, Selective Export Push

• Domestic demand driven by automotive, railways, metros, and white goods — railway segment benefitting from austenitic stainless steel adoption in Vande Bharat and K-Right project (Segment 4).
• Management cited strong demand in appliances, white goods, railways, metro — and long-term opportunities in nuclear, semiconductor, ethanol, desalination, LNG, robotics, EV, and green energy (Segment 5).
• Export strategy targets high-margin markets (South Korea, Japan, Brazil) — with non-vanilla grades; export percentage not expected to increase significantly (Segment 10).
• Europe and US together account for ~50% of export volume mix, Europe alone 30–40% — EU quotas, not C-BAM, are the primary constraint (Segments 8, 11).
• New markets being developed — Japan, South America, Brazil, Colombia, South Korea to mitigate European quota impact and Middle East disruptions (Segment 15).
• Export share was ~11% in Q1 — due to lower domestic base; management aims to maintain current export volumes as part of EBITDA maximization (Segment 6).
• Demand was not an issue in Q1 FY 2026-2027 — the production disruption was caused by gas shortages and logistics bottlenecks (Segment 12).

Anti-Dumping, QCO, and CBAM Developments

• Anti-dumping duty (ADD) public hearing scheduled for 9 Sep 2026 — management expects a positive outcome, but final decision could take a couple of quarters after the hearing (Segments 11, 14).
• QCO suspension expected to remain until March 2027 (Q4 FY 2026-2027) — management is lobbying for no further extension (Segment 11).
• CBAM: all internationally accredited verifiers in place — confident of meeting reduced EU quota requirements; waiting for EU to appoint verifiers (Segment 8).
• C-BAM not impacting Jindal Stainless — rather, European Union quotas are affecting export volumes (Segment 11).
• Management optimistic about regulatory QCO framework — expects it to evolve to support a level playing field (Segment 4).
• Competitors Sal and Posco made similar Indonesian investments — management noted "Competitors Sal and Posco have made similar Indonesian investments in nickel ore/pig iron" as validation of earlier supply chain concerns (Segment 15).

Volume Growth Reaffirmed, H1 EBITDA Band Intact

• 8–10% sales volume growth target for FY 2026-2027 — reaffirmed; any revision will be disclosed in H2 FY 2026-2027 (Segment 6).
• Full-year volume outlook to be provided with Q2 FY 2026-2027 results — management declined to give monthly data for June/July (Segments 7, 10).
• EBITDA per tonne guidance of Rs.18,000–Rs.20,000 for H1 FY 2026-2027 — unchanged; will revisit at end of Q2 (Segment 7).
• PT GMI transition to associate effective 1 July 2026 — ownership change does not affect slab availability or EBITDA guidance (Segment 16).
• RKEF business positive EBITDA in Q1 FY 2026-2027 — but profitability remains volatile due to nickel prices (Segment 11).
• Chromeni plant at 80–85% utilization, major contributor during gas disruption — Rabirun at 70% utilization, EBITDA positive on polishing; cold rolling mill operational in FY 2027-2028 (Segment 15).