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Jindal Stainless Ltd

| Q2 FY26 Earnings Conference Call

NEUTRAL SENTIMENT

Report Source

⬤11th Nov 25

Summary : Jindal Stainless reported strong Q2 FY26 performance driven by domestic demand and strategic sector focus, while navigating global trade uncertainties and import pressures.

Management Perspective positive : We sustained strong growth in our deliveries, increasing by around 15% year-on-year. I am pleased to share that we have opened our first stainless steel fabrication unit. We are pleased to report continued improvement in our balance sheet. All subsidiaries have shown improvement and contributed positively to the group's overall EBITDA.

Concall Report Analysis & Insights

Business Overview

  1. Q2 FY26 deliveries increased 15% YoY and 3% QoQ to 648,050 metric tons.
  2. Value-added products and special product division showed strong growth.
  3. Opened first stainless steel fabrication unit in Patalganga for infra sector.
  4. Renewable power utilization at Jajpur and Hisar facilities reached 42% in Q2 FY26.
  5. Trained 6,700 fabricators in Q2, cumulative 60,400, strengthening ecosystem.

Future Growth Prospects

  1. National Metro Network expansion targets 1,000 km, boosting demand.
  2. Auto segment expected to remain strong in Q3 due to recent GST cuts.
  3. Infra segment's shift to corrosion-resistant stainless steel offers growth.
  4. Green hydrogen plant at Jajpur facility targeted for completion by mid-next year.
  5. All expansion projects, including NPI and cold rolling, are on track.

Management Insights

  1. Sustained strong growth in deliveries, driven by domestic demand.
  2. Strategic focus on expanding presence across diverse sectors.
  3. Committed to delivering high-quality products without compromising standards.
  4. Balance sheet improved with net debt reduced to INR 3,646 crores.
  5. All subsidiaries showed improvement and contributed positively to EBITDA.

Signs of Skepticism

  1. Management could not quantify PLI scheme benefits yet.
  2. Uncertainty regarding CBAM clarity impacts export outlook.
  3. QCO suspension creates downward pressure on prices.
  4. NPI EBITDA contribution range ($500-$1,500) is very wide.
  5. Timelines for asset consolidation are not yet firm.

Risk Factors

  1. Global trade disruptions continue to impact overall trade flows.
  2. Soft demand persists in the US and EU markets.
  3. CBAM implementation transition phase slows buying activity.
  4. Subsidized and substandard materials continue to flow into India.
  5. Temporary suspension of QCO is concerning for domestic industry.

Good To Know

  1. Q2 consolidated EBITDA increased 17% YoY to INR 1,388 crores.
  2. Q2 consolidated PAT increased 33% YoY to INR 808 crores.
  3. Net debt-to-EBITDA ratio is 0.73x, net debt-to-equity ratio is 0.2x.
  4. Chromeni achieved 70% utilization, NPI operated at 90% utilization.
  5. Q2 product mix: 200 series 34%, 300 series 49%, 400 series 17%.

Key Drivers

  1. Domestic demand continues to improve.
  2. Infrastructure expansion drives rebar.
  3. Increased renewable energy adoption.
  4. New fabrication unit for infra.

Key Analyst Discussions

Competitive Environment

  1. PLI scheme for stainless steel flats and longs is being evaluated.
  2. CBAM clarity is needed for export push to Europe.
  3. QCO order suspended until December, creating market uncertainty.
  4. Company is pro-QCO to protect against substandard imports.
  5. Actively promoting co-branding to differentiate high-quality products.

Market Trends & Consumer Behavior

  1. Domestic demand continues to improve across sectors.
  2. Festive demand drove strong growth in white goods segment.
  3. Stainless steel adoption rising in infrastructure projects.
  4. Stainless steel rebar orders are picking up from private sector.
  5. Indian stainless steel demand is rising with economic growth.

Financial Highlights

  1. Q2 consolidated EBITDA was INR 1,388 crores, PAT INR 808 crores.
  2. H1 FY26 CAPEX was INR 1,260 crores, on track for INR 2,700 crores.
  3. Net debt reduced to INR 3,646 crores, with strong debt ratios.
  4. Volume guidance of 9-10% for the year is being maintained.
  5. Chromeni is at 70% utilization, targeting 80% in H2.

Product Composition

  1. Q2 product series breakup: 200 series 34%, 300 series 49%, 400 series 17%.
  2. Targeting to maximize rebar sales in the future.
  3. Current rebar sales 6000-7000 tons, wire rod 3000-4000 tons.
  4. Rathi Steel acquisition focused on wire rod and stainless-steel rebar.
  5. RVPL polishing lines business is ongoing and contributing positively.

Strategic Considerations

  1. New fabrication facility at Jindal Stainless Steelway Limited launched.
  2. Maharashtra expansion plans will be shared in a full-day session.
  3. Consolidation of subsidiaries (Chromeni, RVPL, RT) is in the pipeline.
  4. Own Sukinda chrome mine operations to start next year.
  5. Acquired Rathi Steel two years ago for long products and rebar.
Jindal Stainless Ltd (JSL) Concall Report Analysis & Insights | Dhanarthi