Jindal Steel Q2 Revenue Hits Record Rs 19,448 Crore

Jindal Steel reported record quarterly revenue of Rs 19,448 crore and a reduction in net debt to Rs 14,786 crore.

Reader Takeaway: Record sales volumes and infrastructure gains boost growth, though monsoon-impacted margins and input inflation warrant caution.

What just happened

Jindal Steel posted a strong performance in Q2 FY27, driven by a record sales volume of 2.38 million tons. Revenue grew 44% year-on-year to Rs 19,448 crore. However, consolidated profit after tax (PAT) slipped sequentially to Rs 771 crore, down from Rs 844 crore in the previous quarter, largely due to higher operating expenses during the monsoon season.

Why this matters

The successful commissioning of the slurry pipeline is a major milestone, as it is expected to generate cost savings of Rs 700 per ton and improve logistics efficiency. Furthermore, the company’s ongoing effort to shift its product mix toward higher-value flat products—targeting a 65%-35% ratio—is designed to enhance long-term profitability.

The backstory

Jindal Steel has been focused on deleveraging its balance sheet. During the quarter, net debt dropped by Rs 1,141 crore. The net debt-to-EBITDA ratio has improved significantly to 1.51x, down from 1.71x in Q1, highlighting the management's commitment to financial discipline even while continuing major capital expenditure projects.

What changes now

Management has maintained its FY27 production guidance of 11 million tons. With 4.79 million tons produced in the first half, the company aims to hit a 3 million ton/quarter run rate in the second half. Additionally, coal-based gasification is being used to substitute more expensive fuel sources like propane to manage input cost volatility.

Risks to watch

Management cited potential headwinds including coking coal price inflation of $20-$25 per ton expected in Q3 and fuel cost risks stemming from geopolitical tensions in West Asia. Additionally, the timely commissioning of the new pellet and DRI plants remains a key operational dependency for meeting future production targets.

Context metrics

• Total Planned Capex: Rs 47,000 crore (with Rs 8,000-9,000 crore remaining).
• Domestic Sales Contribution: Approximately 92% of total volume.
• Captive Coal Sourcing: Currently 50-55%, with a target of 65-70%.

What to track next

Investors should watch for the progress of the DRI and pellet plant ramp-ups, scheduled for mid-2027, and whether the company can sustain its net debt-to-EBITDA ratio below the 1.5x threshold amidst fluctuating commodity prices.