JSW Steel anticipates an increase in steel demand as New Delhi’s spending normalizes in the last fiscal quarter, following a year marked by a slowdown due to elections and the establishment of a new government. Jayant Acharya, joint managing director of JSW Steel, noted that steel demand experienced significant growth in the first nine months of the current fiscal year, despite low capital expenditure (capex). He believes this positions the market for strong growth in the medium term.
Acharya highlighted that domestic steel demand has remained robust even with reduced capex from April to November. With the elections now concluded and weather-related disruptions behind, he expects capex to improve in the latter part of this financial year, contributing to a strong fourth quarter.
JSW Steel, India’s largest steel producer by capacity, reported a 1% year-on-year decline in consolidated revenue to ₹41,378 crore for the October-December quarter, with consolidated profit dropping more than two-thirds to ₹719 crore. Earnings before interest, tax, depreciation, and amortization fell 22% to ₹5,579 crore.
From April to November 2024, government capex reached ₹5.13 trillion, just under half of the budget allocation of ₹11.11 trillion for fiscal 2024-25. Acharya expressed optimism about the government’s commitment to driving growth and capex, which he believes will benefit India in the medium to long term, despite challenges related to trade measures and mining.
He referred to the recent increase in steel imports into India, which surged by 22% in 2024 to 9.2 million tonnes, primarily from China and Japan. While these imports constitute a small portion of India’s annual steel consumption of about 150 million tonnes, they are affecting domestic steel prices, prompting large domestic steelmakers to call for restrictions on rising imports.
Additionally, Acharya mentioned a recent Supreme Court ruling granting states the authority to impose taxes on mining, alongside the central government’s royalty. This ruling has created uncertainty in the metals and mining sector, as its retrospective application could lead to significant liabilities for mining companies, ultimately impacting the entire industry.
Steelmakers are urging the government to provide clarity on mining regulations and challenges in the upcoming budget. Acharya emphasized the industry’s desire for continued focus on government capex in a structured manner.
