Jindal Steel & Power (JSPL) is reinstating its annual production and sales volume guidance for the financial year 2026, with crude steel production projected to be between 9 million and 10 million tonnes. This announcement follows a concall update from the company. JSPL has a significant presence in the steel, power, mining, and infrastructure sectors in India, with manufacturing capacities in Chhattisgarh, Odisha, and Jharkhand. The company has been expanding its capacities, including a 6 million MTPA expansion project with key facilities expected to be completed around March 2025. JSPL’s current crude steel capacity is around 9.6 million tonnes, and it aims to increase this to 15.9 million tonnes by FY25.
Key Insights:
The restart of production and sales guidance for FY26 indicates a renewed focus and potentially positive outlook from JSPL’s management regarding their operational capabilities and market demand. The projected crude steel production of 9-10 million tonnes suggests a significant ramp-up in output compared to the saleable steel volume of 7.67 MTPA reported for FY24 and 3.94 MTPA in H1 FY25. This guidance aligns with JSPL’s ongoing capacity expansion plans, particularly at its Angul plant in Odisha. The successful commissioning of the Hot Strip Mill (HSM) and progress in other expansion projects, such as Blast Furnace BOF-II and BOF-III, are crucial for achieving these targets. The Indian steel industry is currently facing a complex environment with rising imports, especially from China, Vietnam, and Indonesia, which are putting pressure on domestic producers. However, there is also an expectation of increased domestic demand driven by infrastructure and construction activities. Potential safeguard duties on steel imports could provide some relief to domestic manufacturers by reducing import volumes and improving profitability.
Investment Implications:
For investors, JSPL’s restarted production guidance could signal stronger revenue and profitability in FY26 if the company successfully scales up its production and sales in line with the target. The ongoing capacity expansions, once fully operational, are expected to position JSPL as one of the leading steel producers in India. However, investors should also consider the broader market dynamics, including the impact of imports on steel prices and the volatility in raw material costs such as coking coal and iron ore. Government policies, such as the potential imposition of safeguard duties, and the overall growth of the Indian economy and infrastructure sector will also play a crucial role in the company’s performance. Monitoring the progress of JSPL’s capacity expansion projects and the trends in domestic and global steel prices will be important for making informed investment decisions.
