JSW Steel reported a strong first quarter for FY27, with consolidated EBITDA per tonne reaching ₹15,013, surpassing analyst expectations. The performance was driven by a 17% quarter-on-quarter rise in net selling realization and higher export volumes. Investors should track the impact of rising coking coal costs, projected to climb further in the coming quarter, against the company's production ramp-up plans.
JSW Steel has announced its financial and operational results for the first quarter of fiscal year 2027, highlighting a period of increased pricing and volume growth. The company’s consolidated steel volumes, excluding Bhushan Power and Steel Ltd (BPSL), rose by 4% compared to the same period last year, reaching 6.25 million tonnes. This volume growth was supported by a 46% year-on-year surge in export sales, which totaled 0.68 million tonnes, alongside steady domestic demand from the automotive, renewable energy, and appliance manufacturing industries.
Pricing Gains and Margin Drivers
A primary factor in the company’s quarterly performance was the improvement in the average consolidated net selling realization, which increased by 17% quarter-on-quarter to ₹75,782 per tonne. This rise was largely fueled by a 9% sequential increase in Hot Rolled Coil prices. Profitability also benefited from a shift toward higher-value products, specifically through the increased sale of special products from the joint venture with Monnet Ispat Limited. Additionally, higher revenue generated from byproducts provided a boost to the overall financial outcome.
Impact of Rising Input Costs
While revenue trends remained positive, the company navigated notable cost pressures. Increased expenses for coking coal, which rose by US$17 per tonne, and higher iron ore prices negatively affected operating margins. Furthermore, the company cited additional operating expenses of approximately US$20 per tonne linked to the ongoing Middle East crisis. Despite these challenges, the consolidated EBITDA per tonne of ₹15,013 managed to exceed internal estimates from brokerage firm Prabhudas Lilladher, which had projected a figure of ₹13,632.
Future Guidance and Operational Outlook
Looking toward the second quarter of FY27, management has flagged further expected increases in coking coal costs, estimated at US$12-15 per tonne. To counter these rising input costs, the company is focusing on volume growth, specifically through the ramp-up of its 4.5 million tonnes per annum blast furnace number three. JSW Steel has maintained its full-year guidance, aiming for consolidated sales of 28.6 million tonnes and production of 29.75 million tonnes. The company continues to project domestic steel demand growth in the range of 7-9% for the fiscal year. Investors will continue to monitor whether the volume-led growth from new capacity additions can successfully offset the pressure on margins from volatile raw material prices.