Jindal Steel - Expansion Strategy To Propel Growth In The Long Run: Motilal Oswal

Motilal Oswal Report

Jindal Steel and Power Ltd.’s ongoing capacity expansion at Angul (Odisha) will boost the crude steel capacity by 65% to 15.9 million tonnes per annum and finished steel capacity by 83% to 13.75 mtpa. The expansion is expected to complete by Q1 FY27 and position JSPL as the fourth-largest steel producer in India.

JSPL is also undertaking cost-effective measures to expand the operating margin through:

1. the strengthening of raw material integration,

2. increase in the captive power plant share,

3. higher flat steel mix to ~55%, and

4. focus on value added product (current share ~67%).

JSPL has started production at the Gare Palma IV/6 coal mine (EC ~4 mt; R&R ~160 mt) and supplies coal to the Raigarh unit.

Further, as the Utkal C, B1, and B2 come on stream, the raw material integration and cost-effectiveness will increase, leading to margin accretion.

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