**JSW Steel Reports Strong Q1 Profit Amid Rising Steel Prices**
JSW Steel Ltd has announced impressive profits for the June quarter, surpassing expectations due to increased production and sales volumes, alongside a decrease in coking coal costs, a crucial raw material. The company’s profit for the first quarter soared to ₹2,209 crore, a significant rise from ₹867 crore in the same period last year, as detailed in their exchange filings. This growth is largely attributed to improved steel prices, bolstered by the government’s 12% safeguard duty aimed at shielding the domestic industry from low-cost steel imports from China.
Suman Kumar, an analyst at Dolat Capital, noted, “Steel prices increased during the quarter, and sales volumes also rose due to the ramp-up of the Vijayanagar expansion project.” However, he cautioned that the rise in steel prices may be temporary, emphasizing the need for further government action to enhance profitability for Indian steelmakers.
As the largest steel producer in India by capacity, JSW Steel reported consolidated revenue of ₹43,147 crore for the April-June quarter, up from ₹42,943 crore a year earlier, exceeding the average analyst projection of ₹42,790 crore from 23 analysts surveyed by Bloomberg. The company benefited from lower raw material costs, particularly coking coal, although this was partially offset by increased fuel consumption due to planned blast furnace shutdowns. Additionally, a decline in mining royalties contributed to reduced overall expenses.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter rose by 37% year-on-year to ₹7,576 crore. JSW Steel has maintained its production and sales guidance for the fiscal year 2025-26 at 30.5 million tonnes and 29.2 million tonnes, respectively. In the June quarter, the company invested ₹3,400 crore out of an estimated capital expenditure of ₹20,000 crore for FY26. For FY25, JSW Steel had initially projected a capex of ₹20,000 crore but later revised it to ₹16,000 crore, ultimately spending ₹14,656 crore.
The steelmaker achieved consolidated production of 7.26 million tonnes for the June quarter, marking a 14% increase from the previous year, while sales volume improved by 9% to 6.69 million tonnes. In a post-earnings discussion with analysts, the management indicated that sales volume is expected to rise in the second quarter as maintenance shutdowns conclude. They also mentioned the commissioning of a second converter at JSW Vijayanagar Metallics Ltd, which is anticipated to lower production costs.
However, the management warned of potential demand weakness in the ongoing second quarter due to monsoon rains. “In Q2, we expect some seasonal volume weakness due to the monsoon. While steel prices have decreased, we anticipate a further drop in coking coal prices, which will help mitigate the price decline. The long-term outlook remains positive,” Kumar added.
JSW Steel’s management expressed optimism regarding a favorable outcome when the government reviews the safeguard duty, which could further support the industry.
**FAQ**
**What factors contributed to JSW Steel’s profit increase in Q1?**
JSW Steel’s profit increase in Q1 was driven by higher production and sales volumes, improved steel prices due to government safeguard duties, and lower coking coal costs.