Jindal Stainless Ltd (JSL) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator (ICICI Securities Limited): Ladies and gentlemen, good day and welcome to Jindal Stainless Limited Q2 FY27 Earnings Conference Call hosted by ICICI Securities Limited. As a reminder, all participants' lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Vikas Singh from ICICI Securities Limited. Thank you and over to you, sir.
Vikas Singh (ICICI Securities Limited): Thank you, Ishira. Good afternoon, everyone. A warm welcome on today's concall. We would like to thank the JSL management for giving us the opportunity to host them. From the management side, we have with us, Mr. Abhyuday Jindal - MD, Mr. Tarun Kumar Khulbe - CEO, Mr. Kunjal Mehta - CFO, Mr. Kapil Arora - Head of Corporate Finance, Mr. Sanjay Kumar Gupta - SVP Finance, Mr. Angad Khurana - Head of Investor Relationship, and Mr. Abhishek Chhabra - Investor Relationship. Without taking any more time, I'll hand it over to Angad to start the call. Over to you, Angad.
Angad Khurana (Jindal Stainless Ltd): Thank you, Vikas. Good day, everyone and thank you for joining us for the company's Q2 and H1 FY27 earnings call. I hope all had a chance to review the results and the accompanying presentation uploaded on the exchanges and on our website. Our discussion on the call will follow that presentation. Before we begin, I would like to remind you that some of the statements made today may be forward-looking in nature and are covered by the disclaimer on slide two of the earnings presentation. Joining me on the call today is the senior leadership team who will take you through the key business developments and performance for this quarter. After after the remarks, we will open the floor for the questions. With that, let me hand it over to our MD, Mr. Abhyuday Jindal. A small note here, Abhyuday Sir is traveling right now. He's in a different time zone and may have to drop in during the middle of the call. Over to you, Sir.
Abhyuday Jindal (Jindal Stainless Ltd): Thank you, Angad and good evening to everyone. I would like to welcome you all to the Q2 and H1 FY27 earnings call. I will begin by outlining the key business highlights for the quarter ended September 2026.
Abhyuday Jindal (Jindal Stainless Ltd): following which Mr. Kuldeep will take you through our operational and financial performance. The second quarter marked a strong recovery from disruptions witnessed in Q1 of this year. We delivered double digit quarter-on-quarter growth in both sales volume and net revenue, supported by a high share of value-added products, driven by the strong momentum in automotive and ornamental pipe and tube segments. Turning to market demand, domestic demand remained healthy across our key end-use segments, including automotive, railways, metros, lift, elevators and white goods. This was supported by robust economic growth and an increasing awareness about life cycle costing. We also witnessed global acceptance of plates and ferritic grades across white goods and lift and elevator applications. On the international front, exports recorded strong growth both sequentially and year-on-year, reflecting our continued focus on market diversification. We are expanding our presence across markets, including South Korea, Colombia, South Africa, Brazil and Japan, as we continue to pursue value added opportunities globally. On the operational front, industrial gas availability remained stable during Q2, with no recurrence of the challenges experienced in the previous quarter. We continue to be watchful of developments on this front as uncertainties continue to resurface. Amid this, our transition to natural gas has strengthened operational resilience, supporting uninterrupted operations. Alongside strengthening our presence in established segments, we continue to expand our portfolio, our product portfolio, and develop new applications for stainless steel. Key achievements include the development of India's first high-aluminum stainless steel grade for catalytic converters and development of two new 400 series grades, one of which has opened up a new market in South Africa. Additionally, we entered into a Technical Assistance Agreement with Japan's JFE Steel for selected ferritic grades, further strengthening our technical capabilities. During the quarter, we also made progress on strengthening our corporate structure and credit profile. The Board approved amalgamation of four wholly owned subsidiaries into Jindal Stainless Limited, a step towards simplifying our group structure and enhancing operation efficiency and governance as well. Further, CARE Ratings upgraded our long-term debt credit rating to AA+ stable. On brand and customer engagement, we continue to expand our reach through our Pipe and Tube campaign. With airport branding at Delhi and Mumbai airports, and influencer-led digital outreach, we also expanded our brand ambassador, Ravi Kishan's presence, across pack partner packaging and marketing collateral. Our Jindal Saathi loyalty program continued to gain traction amongst retailers and fabricators, receiving Gold and Silver awards at the ET Brand Equity MarTech and DigiPlus Awards. The Saathi seal co-branding initiative was also extended to water tanks, strengthening our engagement with channel partners. We have made further progress in skill development and digitalization. Stainless Academy signed an agreement with NCVET for recognition as an awarding body, paving the way for government-recognized certification programs for the stainless steel ecosystem. Our B2B platform achieved full digital adoption among MoU trade and plates trade and plates and tube channel partners. In addition, Jindal Lifestyle commissioned a new powder coating facility at Pathredi to cater to metro and infrastructure applications. Sustainability remains an integral part of our long-term strategy. During the quarter, we reduced our Scope 1 and Scope 2 greenhouse gas emissions intensity by 12% compared with FY '22 levels. We also published our TCFD and TNFD reports, reinforcing our commitment to transparent climate and nature-related disclosures and our long-term net zero ambitions. The domestic market continued to face import pressure since April 2024, following the suspension of the Quality Control Order. Imports of substandard products, particularly from China and of Chinese origin, have increased significantly. Chinese origin imports during the first four months of the current fiscal year alone to alone were equivalent to nearly two-thirds of the total recorded imports recorded during the previous fiscal year. We believe that maintaining consistent quality standards is essential for public safety, product reliability and fair compens- competition. We remain hopeful that the regulatory framework will evolve to appropriately balance consumer interests,
Abhyuday Jindal (Jindal Stainless Ltd): of domestic manufacturers and the broader economic interest. To conclude, Q2 reflects our ability to recover from near-term disruptions while continuing to strengthen our business for the long term. We remain focused on expanding our market reach, developing new applications, improving our product mix, and deepening our presence across domestic and international markets. We remain confident in the long, long-term growth opportunities for the industry. With that, I would like to hand over to Mr. Kulveer, who will take you through our operational and financial performance in greater detail. Thank you.
Tarun Kumar Khulbe (Jindal Stainless Ltd): Thank you, Abhyuday. Good evening, everyone. Welcome to the call. I would like to begin by providing a detailed overview of our operational and financial performance. JSL reported a resilient consolidated financial performance in the second quarter of FY '27. On a quarter-on-quarter basis, revenue, EBITDA, and PAT grew around 14%, 8%, and 17% respectively, as operations normalized from the industrial gas and logistics disruptions of the previous quarter. Our finished good sales volume grew 14% quarter-on-quarter and 3% year 3% year-on-year. For H1 FY '27, our deliveries stood at 1.25 million million tons, reflecting a marginal decline of 2% year-on-year. Consolidated EBITDA increased by around 2% year-on-year to ₹2,762 crores, while consolidated PAT rose by approximately 9% year-on-year to ₹1,666 crores. Domestic demand remained robust across key end-use segments, with the domestic market growing 14% Q quarter-on-quarter, highlighting strong demand momentum in the country. Exports also registered a strong growth of 20% on quarter-on-quarter and 36% on year-on-year terms, accounting for 11% of total volumes in Q2 FY '27. JSL continued to focus on value-added products, supporting the company's profitability. While gas supplies remained largely stable through the quarter, we remain watchful of geopolitical developments. Our balance sheet remains robust. At the end of September 2026, our consolidated net debt stood at ₹3,121 crores, with a net debt-to-EBITDA ratio of 0.55x, comfortably below 1, and a net debt-to-equity ratio of 0.15x, reflecting our prudent fiscal management. During the quarter, our CapEx spend was approximately ₹895 crores, bringing the total CapEx in this fiscal to ₹1,555 crores, in line with our guidance. All our announced projects remain on track and adhere to stipulated timelines. In this dynamic environment, JSL revises its full-year volume growth guidance to 4% to 6%, from earlier 7% to 9%, and EBITDA per ton guidance to ₹20,000 to ₹20,00 to ₹22,000 per ton, up from earlier ₹18,000 to ₹20,000 a ton. The CapEx and net debt guidance range remains unchanged at ₹2,400 to ₹2,600 crores and ₹2,500 to ₹2,800 crores, respectively. The revision in guidance predominantly reflects the impact of quarter 1 disruptions, mitigated by the company's renewed focus on delivering a value-added product mix. In this context, it is important to reiterate JSL's commitment to deliver on its sales volume target of 3.5 million tons per annum by FY '29. Our timely investments in both upstream and downstream facilities shall enable us to continue to be at the forefront of the growing India stainless steel story. In the quest to streamline our operations further, we have announced a scheme of amalgamation that will bring Jindal United Steel Limited, Chromeni Steels Limited, JSL Super Steels Limited, and Raviran Vinimay Private Limited into the parent entity. Into the parent entity. This will optimize utilization of financial and other resources, improve operational efficiency, reduce administrative and compliance costs, eliminate inter-company transactions and balances, and facilitate better management oversight.
Tarun Kumar Khulbe (Jindal Stainless Ltd): this is in making. Emerging teams such as energy crisis, climate change, and self-reliance carry strong tailwinds that boost newer stainless steel application in sectors such as like nuclear, semiconductor, ethanol, desalination plant, and green energy. JSL's strong customer, R&D, and quality focus puts it in the puts it in the best position to serve these new frontiers. On that note, I conclude my remarks and invite the moderator to begin the question and answer session.
Moderator: Thank you very much. We will now We will now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Amit Dixit (Goldman Sachs): Yeah. Hi. Good afternoon, everyone. And thanks for the opportunity. Congratulations for a good set of numbers in a very challenging operating environment. A couple of questions from my side. The first one is essentially on on the influx of imports. Now previously, we were possibly not eligible for any protectionist measures because imports were continuously high, but in July as per the prepared press release, we saw that there was a significant influx in imports. So, are you working with the government to look at this situation more favorably? Because we saw in this quarter that the domestic volumes were down almost 1% YoY, which has not been in the case in the past. So, just wanted to get your thoughts on this.
Tarun Kumar Khulbe (Jindal Stainless Ltd): Okay. So, so far as import this dumping is concerned, Amit, you're right that industry is definitely worried. And it while it hurts the sentiment, I mean, on one hand, the quality control being removed opens the opens the possibility of using of of the use of you know inferior quality products being used into the public safety and other applications where the quality critical quality norms are required. Our MSME players are definitely badly even even worse impacted by this. Many of them are facing the challenge of the for for their to to run their business. We as an industry, we are representing to the government and constantly our through our associations, we are representing and informing government about this dumping. So far as our ADD application is concerned, for that, the time line has been extended by DGTR, I mean like for within the 1 year they they should have concluded. But okay, now they have extended extended it by another 6 months up to March 31st. But we believe that by 31st of December, some decision should come into that. Now we are just hoping that that whatever the efforts our industry representatives are making with the government, eventually the government would understand, would put the control on one hand on the on the this quality requirements in the form of QCOs and also from the on the ADD front, we are hopeful that DGTR will come out with some some positive this positive recommendations.
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