Ladies and gentlemen, good day and welcome to the Jindal Steel Limited Q3 FY 2026 earnings conference call, hosted by IIFL Securities Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Prateek Singh from IIFL Securities. Thank you, and over to you, sir.
Thank you, Pari. Good afternoon, everyone, and welcome to the third quarter FY 2026 earnings call of Jindal Steel Limited. Without further ado, I will now hand over the call to Mr. Vishal Chandak, Head Investor Relations and Strategic Finance, to introduce the management attendees and take it forward. Over to you, Vishal.
Hi, Prateek. Thank you very much. Thank you very much, ladies and gentlemen, and appreciate you coming over a weekend. I once again welcome you to the Q3 FY 2026 earnings briefing of Jindal Steel. We have with us senior management of the company, Mr. Gautam Chandra, CEO; Mr. Sabyasachi Bandyopadhyay, Whole-time Director; Mr. Pankaj Gautam, Executive Director, Angul; Mr. Sunil Agrawal, CFO; and Mr. Sushil Tirhan, Head, Flat Products. I request all the participants to ask questions which are strategic in nature, and for any factual-related queries, we are always there to help you out. Without much ado, I will hand over the floor to our CEO, Mr. Gautam. We also have our Whole-time Director, Mr. Damodar Mittal, Mr. Neeraj Kumar on the line. Over to you, Gautam, sir.
Thank you, Vishal. Good afternoon, ladies and gentlemen. Welcome to Jindal Steel's first quarter FY 2026 earnings briefing. I appreciate it is a Saturday afternoon, so a sincere thank you for finding the time to join us. From a macro perspective, let me start by touching upon the supply-demand imbalance in the Chinese steel industry, which clearly has an impact on global markets, including India. The downturn in Chinese steel demand continues to outpace the decline in domestic steel production, resulting in record exports of 119 million tons in calendar year 2025. This level of low-price exports has prompted several countries to impose tariff and non-tariff barriers to curb the impact of Chinese steel imports on the local markets.
Focusing on India's performance during the quarter, crude steel production rose 2% quarter-on-quarter to 42.5 million tons in Q3 FY 2026, while demand increased only by 0.5% quarter-on-quarter to 40.7 million tons. Trade dynamics improved materially. Exports increased 30% to 2.5 million tons, and imports reduced by 36% to 1.6 million tons sequentially. Consequently, India turned a net steel exporter again in Q3 FY 2026 for the first time after 6 quarters, with net exports of 0.8 million tons.
On trade measures, following the DGTR's recommendation, the Ministry of Finance has notified a definitive safeguard duty on select steel imports for a period of three years on ad valorem basis, with step-down rates of 12% in year one, 11.5% in year two, and 11% in year three, ending on 20 April 2028. During the quarter, domestic steel prices in India corrected on the back of weak demand. HRC prices remained under pressure due to weak Chinese steel prices, while TMT prices reflected subdued construction activities. However, prices have recovered since mid-December 2025 after a prolonged correction, and we further expect support in Q4 with improving overall demand dynamics. Coming to Jindal Steel, the business update. On projects, we operationalized CPP Module One of 525 megawatts during the third quarter FY 2026.
We are happy to report that we have also synchronized CPP Module Two of 525 MW again, with a grid in January 2026. With this, we have achieved yet another major milestone of turning around 1,050 MW power plant that we have acquired under the IBC. We are also pleased to report that we have commissioned CCL1 with a capacity of 0.2 million tons per annum in January 2026. This broadens our product portfolio and supports further margin enhancement going forward. We have opened the Utkal B1 mine, and overburden removal is currently underway. The 3 million tons per annum Basic Oxygen Furnace 3 at Angul remains on track for commissioning by Q4 FY 2026, and upon commissioning, we will reach 13.6 million tons of steelmaking capacity.
All other projects are progressing as planned and remain on track for commissioning within the scheduled timelines. Coming to the financial results. Total production in Q3 FY 2026 increased 25%, quarter on quarter to 2.51 million tons. This was supported by two factors. Firstly, the ramp-up of the BF2 and BOF2 facilities at Angul. Secondly, our newly commissioned Subhadra Blast Furnace 2 achieved capacity utilization of 48% in Q3 FY 2026, with an exit run rate of 58% utilization. Sales volume rose 22% quarter on quarter to 2.28 million tons, driven by higher production. Consolidated third quarter FY 2026 gross revenue increased 12% quarter on quarter to INR 15,172 crores.... driven by higher sales volume, but partly offset by weaker steel prices.
Consolidated Adjusted EBITDA for the quarter was INR 1,593 crore, translating to a margin of 10.5% and EBITDA per ton of INR 6,981. However, this includes a one-time BF2 startup cost of INR 350 crore. If we take this non-recurring expense out, the underlying business EBITDA for the quarter is higher by INR 1,535 per ton, taking the EBITDA per ton to INR 8,516 for the quarter. Consolidated PAT for the quarter, again, post the one-time startup cost, was INR 189 crore. Our blended steel NSR was down by about INR 3,000 per ton on a sequential basis as the incremental volumes were skewed towards HRC, which carried the lowest realizations and margins in our product basket.
Within HRC, our sales emphasis was on high throughput, productivity-driven segments and sizes rather than lower volume, value-added trades. The shift in product mix further compressed the ASP. In addition, our byproduct revenues did not grow in line with our steel revenue as the coke oven plant was commissioned towards the mid of Q3 FY 2026. Further, the lower byproduct sales and other operating income also contributed to the drop in ASP on a quarter-on-quarter basis due to the increased captive consumption. On the cost front, during the Q2 earnings call, we guided for an increase of $3-$5 per ton in coking coal for quarter three. Our actual coal consumption costs during the quarter increased by $2 per ton. During the quarter, BF2 ramp-up was executed using higher-cost bought-out coal or coke at a higher coke rate, resulting in higher operating costs.
With the commissioning of an additional coke oven battery in November 2025, coke costs are expected to normalize, and the BF2 coke rate has already begun to stabilize. Supported by improving steel realizations, we expect a meaningful improvement in performance in Q4 compared to Q3. On the CapEx front, we invested INR 2,076 crores during the quarter. With this, our cumulative CapEx under the current expansion program up to 31 December 2025 is INR 32,925 crores, as against our total announced CapEx, our CapEx of INR 47,043 crores. We are investing in our long-term growth, creating assets that will support India's infrastructure build-out. Our investments are not limited to adding new capacity, but also include strengthening our existing portfolio of assets. This will ensure best-in-class capacity utilization, improved asset reliability, and higher profitability in times to come.
This financial year marks an inflection point in our transformational journey to build world-class assets. Coming to our debt profile, consolidated net debt as on 31st December 2025 was INR 15,443 crores, up INR 1,287 crores sequentially. Accordingly, net debt to EBITDA was at 1.72 times at the end of Q3 FY 2026. This is primarily a reflection of lower EBITDA and our CapEx commitments on the commissioning of several facilities. We are excited about the ramping up of production, and the incremental revenues and cash flows are expected to lower our net debt to EBITDA to sub 1.5x levels. At Jindal Steel, AI and digitalization are core to our operations, driving productivity, efficiency, and resilience at scale.
We are executing a multi-year, enterprise-wide AI transformation focused on throughput improvement, cost efficiency, faster decision-making, and margin expansion, moving beyond pilots to scale deployments now. AI-led enterprise intelligence is embedded across sales, dispatch, logistics, and CSO decision support, delivering real-time visibility and actionable insights. Sustainability is at the core of what we do each day at Jindal Steel. With that in mind, I'm pleased to share that in our first year of ESG assessment and disclosure, Jindal Steel has been included in the S&P Global Sustainability Yearbook 2026. Out of nearly 8,500 companies assessed, we are among a select group recognized for this prestigious inclusion, an endorsement of our disciplined ESG execution, which remains central to our strategy.
We have also been awarded an India-Sweden Industry Transition Partnership feasibility project to evaluate a CO2 neutral steel production facility, reinforcing expertise in decarbonization and commitment to sustainable growth. These sustainability acknowledgements and digitalization efforts are the culmination of all the dedicated work being done by the Jindal Steel team across India, and this is something that we are very proud of and keen to build on going forward. For Q4 FY 2026, we expect coal consumption costs to rise by $18-$20 per ton sequentially. Iron ore costs increase further in China. Domestic steel prices are currently higher by about INR 3,000-INR 3,500 per ton as compared to December 2025, and we expect prices to remain supported in Q4 FY 2026 on the back of strong demand and strong tailwinds. With that, I will open the floor for Q&A. Thank you.
...Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. A request to all participants to please restrict their question to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vikas Singh from ICICI Securities. Please go ahead.
Good afternoon, sir, and thank you for the opportunity. My first question is directed towards the realization impact, which you are talking about only INR 3,000. But if we just calculate on the average side, the drop is much higher, almost INR 5,500-INR 6,000. How much is because of the product deterioration, and what else we are missing in here?
So, as I mentioned in my... Yeah, can you hear me?
Yeah, please go ahead.
As I mentioned in my opening statement, we did ramp up our capacities with lower margin products, and it was mainly skewed towards HRC. And as we are actually ramping up, when we were on a lower output on our hot strip mill, we were actually producing, you know, lower productivity, thinner grades, and with very high value-add, and the margins were higher at that time. As we are ramping up, actually thickness levels are increasing, our productivity is increasing, so the realization per ton over there is lower, although we're producing much more. Also, roughly about INR 3,000 is on account of, you know, NSR on this account. The by-product sales were lower. We will actually increase the capital consumption on most of our by-products as our steel production is increasing and the balance is coming from that.
As our capacities ramp up, actually, we do expect that all our by-products will be consumed completely internally. Thank you.
Effectively, on an average, our realization blended budget would increase lower than what the market says because of the by-product credit would not be available. Is that assumption is correct?
Yes, but our cost will also come down, and overall, if you see, as our capacities ramp up, our EBITDA is actually accretive in that nature. We'll actually keep on adding to EBITDA.
Okay, sir. So my second question pertains to our cost savings, exercises, like slurry pipeline, coal, mines coming. Was it the product mix deterioration? Would those cost savings, as per your internal estimates, are good enough to cover for the product mix deterioration? Or, we would see for next one and a half year, our overall product would continue to deteriorate from current point of view?
See, I think, the using the word deterioration would not be correct over here. That's a strong word. You understand quarter three was a tough quarter and, for the entire industry. And if you look at the overall realization, HRC was the most affected out of all the products. So overall, as we move up and the realizations have also started increasing, NSRs have also increased. So there's no deterioration in the product mix. Rather, our portfolio, as we've maintained over a period of time, is getting more balanced towards 50% flats and 50% longs. I think that's a great diversification and provides a lot of strength to the company in times to go forward.
So just to answer my question, would that the cost saving would be able to cover for this change in product mix?
Yes, definitely.
Yeah.
As a result.
Yeah. So, deterioration, basically, we were a little bit baffled because some of the peer group having higher weightage on the flat side had less decline in their average realization. So we are still a little bit unsure about why, how our product mix has changed.
I'll explain to you again. Two things. Our portfolio has a larger portion of longs, especially TMT, and that was actually hit more in terms of the realization drop from the previous quarters. Secondly, as I explained, whilst we were ramping. When we were on a lower production on our HRC, we were actually making more value-add products because we had limited steel. Now, as we're moving towards higher output on HRC, we're actually producing lesser of those grades. We're actually producing more of the thicker sections to get the higher productivity and thereby more EBITDA. So that's why you see the difference between the peers and us, if that explains it.
Noted, sir. Thank you. That's all from my side.
Thank you. The next question is from the line of Parthiv from Anand Rathi. Please go ahead.
Hi, good afternoon. Thanks for the opportunity. Just quickly continuing the previous question forward. You know, one of your peer who has already declared the result, his share of exports has actually increased at a time when, you know, people were actually frontloading, especially to a lot of these geographies where there will be a lot of restrictions due to CBAM, especially in EU. However, your share of exports has gone down to, I think, 5%. That's number one. And also, just quickly to check with that if you are making, you know, thicker HRC and lower value-added product, would it then make more sense to, you know, shift it back towards higher value-added product to get that benefit of a, you know, something over and above your regular blended realizations? Because this is actually impacting your ASP to a great extent.
So I'll answer the first part of the question. You mentioned about exports. As you look at the market in the last quarter, the exports realization were actually lower than the domestic market, even further down. We actually managed to penetrate the Indian market with our expanded production and make space for ourselves in a market which was not expanding itself. That actually shows great strength in the Jindal Steel brand and our capability to penetrate these markets in tough times as well. What I was talking about was the ramp-up phase. I do agree with you, and your point is a very valid one. As we ramp up towards full capacities, first, our target will be capacity utilization, and once we reach very high numbers on utilization, is when we'll start bringing the portfolio back again towards value-added profiles more and more.
I hope that answers both parts of your question.
Sure. But, just quickly, because you said you actually expanded your market share, eventually, right? Because you were able to capture, you know, higher share in the domestic market. But was it at a cost of compromising your margin?
No, actually, compared to exports, our margins in domestic were high.
No, not compared to export, sir. Only on the domestic front. If, even if you see, if you see HRC was down about $2,500, $800, your longs were down about $7,300.
We sell at competitive prices in the market. We didn't take any large discount thing to get into the market to get market share, if that's your question.
Okay. Okay, that actually answers. So my second question was on debt level. If you see one of your slide, slide 20, right? Your debts in Q3 are at, you know, multiyear high. As high as, you know, even higher than FY 2022 levels. And even if you see your leverages are quite high at 1.72, where we appreciate you giving out a guidance of 1.5 as the threshold. I just wanted to get your understanding with your, you know, capacity still ramping up, your new, your capacity also coming up in Q4, which will also, you know, have some kind of, startup cost associated some way or the other. What is your exit current rate of leverage for a net debt expected in current financial year?
So I think firstly, we should appreciate this is very good leverage level overall. Even looking at, you know, the industry, it's a very, very healthy leverage level. If you look at debt to EBITDA, debt to equity ratios also, they also remain very healthy. Yes, we are at a point where we are coming out of a very tough market cycle, which is for the industry, and at the same time, we actually are at the culmination of a project phase in these two quarters, quarter three and quarter four. Now, these factors combined have pushed it up to 1.72 net debt to EBITDA, which you're looking at.
But overall, as I said, as we stabilize, ramp up over the next 2-3 quarters, you'll see it coming back in line to what we've always guided, 1.5 times through the cycle. And we intend, and we remain committed to that.
So any number on the Equirus front, data or debt?
No, I think, I've given you the overall picture as it's panning out.
Sure. Just, sir, again, just circling back to my very first question, because I think your flat to long is right now 50/50, whereas it was supposed to, flat was expected to, you know, be much better off at 60%-65% going forward. So is that run... you know, is that timeline or is that runway still intact to take your flats over 60%-65%, or what's your understanding on that?
Yeah. So good afternoon, I am Sushil Tirhan. I am Head of Flat Products in Jindal Steel. See, in Q3, our flat to long ratio was almost equal, 50/50. And that is because we saw a major decline in flat products rather than long products, so we maintained our product ratio, shifted more towards long in the quarter. But going forward, we expect a gradual shift towards flat. You know, and as demand from flat product and demand, prices for flat product is rising and demand from automotive, appliances, and all the segments is gradually moving up. So according to this, this is expected to go up in flat. I think in the Q4, we see a shift towards 55/45 type of ratio in Q4 for flat, more towards flat. You know, flat 55, long 45 sort of ratio.
Hi, this is Gautam. I just wanted to add, please understand and, you know, we are at a very big inflection point in our journey in Jindal Steel. There's a large capacity coming in. There's huge ramp-up happening. And while we're going through this cycle, we've actually maintained a very healthy balance sheet picture overall. So this is a very interesting year for us. We are at an inflection point. It is actually leading up to some very exciting times coming ahead as these capacities start, throwing out EBITDA and cash flow.
Perfect. That's actually quite helpful. Thank you so much, sir.
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Yeah, hi, good afternoon. Thanks for the opportunity. So on the power capacity expansion, just wanted to understand, like, now that you will be excess, I believe, power capacity, will you, would you be kind of looking to ramp up those capacities and maybe sell, sell it more merchant power, or it will be purely used for steel operations?
At the moment, as I mentioned, first unit is under stabilization, and the second unit has just been commissioned, and we're gonna be stabilizing it over the, you know, next two, three months. Once that happens, our capacities will continue to ramp up. You know, we have another, 2 million tons coming up and associated downstream coming up. So in the near-term future, we'll be actually, as we ramp up all sides of the, capacity and the whole facility, we'll be consuming a large portion of it internally at the moment.
Okay. Okay. And just a question on your mix. So while, as you mentioned, that initially, in the initial phase, possibly the mill mix could be a bit weak, but by when do you think, like in terms of maybe quarters or year, kind of be able to get into a more value-added mix portfolio on the expanded capacity also?
See, I wanna actually come away from these words of degradation and weak. When I do say that we shifted a higher productivity order book, our value-added profile still remains at 66%, and that's very high. What we are comparing that to is 71% in Q2, so that's where we're coming from. That's a very high value-added percentage in our product portfolio. So, I don't think it's weak from any perspective. It's just that we're in a ramp-up phase, we're making a market entry into a product, and we are capitalizing on all opportunities that come out.
Yeah, no, by week, I mean, I think you mentioned that you had almost like an INR 1,000 additional hit to realization because of the shift in the mix. So I was referring more to that, so when can you get INR 1,000 back in that?
So as we speak, the markets have already rebounded. And I did mention, I think in the opening statement itself, that, you know, today we are working at about INR 3,000-INR 3,500, higher than where we were towards the end of the last quarter. And as we move ahead, you will see our value-added profile start inching back towards 70%. So I'm not reading too much into this INR 1,000 differential, and that differential is more as a comparison from Q2 to Q3 on, in our books versus what is happening in the peers' books. I'm more interested in how we, you know, coming out of this situation as we move forward. The more interesting bit will be ramping up our capacities, increasing the utilization, getting the EBITDA in, and the higher cash flows.
Sure, got it. Thanks a lot. Just and this is the last question. So you say that in this quarters you consumed your byproducts internally, which was also an additional hit to realization. So what were those byproducts? If you could explain that a bit, like is it pellets? What would be those byproducts?
You've got it. It's pretty much that. But please also understand that you're seeing at the ASP level, the hit, but at the EBITDA level, the hits are not anything material or not significant.
Okay, got it. Thanks a lot.
Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah, good afternoon, and thank you for the chance. I have two set of questions. First, on the expansion plans. Now we shared that our next blast furnace, BOF, sorry, is on track for fourth quarter. So I want to understand what is when is the associated metallic capacity coming, and what is the plan to use this BOF in FY 2027, given the lack of metallics? And in general, just the strategy of commissioning this ahead of metallic capacity.
So in terms of, you know, going forward, so we're talking about the current traffic cycle, you're right, BOF will be commissioned in this quarter. Anything going forward, we'll be guiding in the next quarter on how we're planning out on that. At the moment, we're very, very focused on commissioning all the current projects and realizing revenue, EBITDA, and cash flows from this.
Yeah. So, just want to understand, what is the plan to use this blast furnace, the BOF, in FY 2027, in absence of metallic capacity?
We'll be able to use about 60%-66% of this capacity in FY 2027 as well.
Okay, so the associated DRI or BF, I think it's DRI. So when is that being planned to commission?
I think we've spoken in one of the earlier calls that, we are targeting FY 2027 end for that, and we're sticking to that.
Okay. So even without that, we are looking at 60% utilization for this BO-BOF?
Yes. Yes, FY 27.
Okay. Sir, with respect to slurry pipeline, just want to understand what are the reasons for the delay? I mean, we still see only 94% complete. And what sort of contribution will this have in FY 2027 in terms of actual slurry transfer and cost savings?
So see, one thing we have to understand, slurry pipelining is never an easy project, and it has a lot of regulatory and other hurdles that you have to go over, and basically ground-level hurdles as well... We have maintained our guidance for the end of this financial year for the slurry pipeline, and we are on track for that. As far as the savings, et cetera, I think, we are very fairly comfortable to say that we'll be able to go towards INR 750-INR 850 a ton on that.
Okay, okay. So my next question is on the sales volume guidance. We're just two months left for the year, so where are we with respect to our 8.5-9 million ton guidance for sales volume this year? Can you give some more further color on this?
We are actually on track to get the guidance that we've already given you. Yes.
Okay, and just one last question on the margins. So I mean, given that we've seen in three quarters a deterioration of almost 16,000 to 7,000, just want to understand, I mean, this ramp-up and start-up cost, has, has this been going as per plan? Was this anticipated or there has been some negative surprises? Because it is quite difficult to appreciate, sir, INR 350 crore of start-up cost. I've not seen that in other companies, and looks like... I mean, just want to get some more grip and understanding on this.
So there are two things. I always don't like going on what, you know, peers are doing. Everybody is good in their areas. But there are two points over here. We've been fairly open and transparent about how we're going about our business, and we've maintained that over a period of time, and we intend to continue doing that. Coming to the second part of your question, yes, a large part of it, when you're ramping up a facility, especially a blast furnace, it's not immediate that you get down to, you know, your capacity utilization numbers or your coke rate. It takes a little bit of time, and that was anticipated. Nevertheless, I don't think we're in a position to say that we didn't receive any surprises.
Yes, there were surprises along the way, but I think I must say kudos to our team, which has been able to counter those surprises and ensure that as we sit today, we are at a very high capacity utilization number with industry standard coke rates and operational parameters. So I think they've done a brilliant job of coming on track on a furnace of this size in 2-2.5 months.
Okay. And if I may just ask one question, just to understand what is the base level of profitability for us to kind of have a better forecasting capability? What, what is the contribution of these byproducts sales, say, from FY, in FY 2025 or, say, onwards, FY 2026? So that we just, I mean, get to some base level of profitability from where we can kind of forecast future earnings.
I think, there are a lot of things in your question. It's got a lot of years spanning it, and there's some forecasting as well. So, in the interest of time, I think I'm asking Vishal to take it offline, if you can connect with him, and he can help you with that.
Sure, sure. I'll connect with Vishal. Thank you, and all the best. Yeah.
Thanks a lot.
Thank you. The next question is from the line of Jaswinder Singh Chadha from Nomura. Please go ahead.
Hello. I hope I am audible, and thank you for the opportunity. Well, most of my interesting questions have been taken by my peer. So I'll start with, sir. So I see that you have a commissioned coal mine as well. There is one iron ore mine also has been commissioned. With that and the global, you know, coal prices going up, what sort of impact do you think will, you know, hit the company in fourth quarter? If we can start with this.
Sorry, can you, I didn't understand. Can you please repeat the question?
Yes, sir. So I just wanted to understand the, you know, input cost escalation that we might see in fourth quarter for JSPL in the street.
I don't think we're expecting any input cost escalation in the fourth quarter. There's only one thing, which I think I have given in the opening statement, is on the coking coal prices. But if you see, the market has more than commensurate increase. So I think there's no material input cost escalation that we're gonna see apart from that.
Okay. So, so largely, what I can understand is you are, you are expecting a flatish input cost. Is my understanding right?
Apart from coking coal, yeah, nothing, nothing there.
Okay, nice. And your second question is, largely, you know, from FY 2027, I understand you have given guidance for FY 2026, and you, you are on track on, you know, on maintaining that guidance. I also understand companies are at inflection point, and, you know, ramping up capacity is not that easy. From that, perspective, how do you see FY 2027 pointing out or, you know, panning out in terms of, you know, production and volume? If you can give, you know, some sense on that, that would be great.
So I think, I'll pick on one thing you said at the beginning of your question. We, we are at an inflection point, yes, I did say that, and, please understand we are maintaining a guideline, a guidance given, in a year where we are commissioning capacities, ramping them up... and sustaining our guidances. And so I think I, I must, even on this platform, congratulate our team for having been able to do that, at least be on track for that towards the end of the year. In terms of FY 2027, I think we'll be coming out very soon. We're in the process of finalizing our business plans for the year. And as soon as we do that, I think at the end of the next quarter, we'll be coming back to you and giving you guidance for that.
Understood, sir. But just one last question. You know, compared to, you know, when you initially announced this first phase of expansion in sometime in FY 2022, early FY 2023, and now, since you are at the end of most of the phase one expansion, how much of the CapEx that you earlier envisaged and now, you know, which you have realized, how much has been the CapEx, you know, cost increased, because of, you know, the various surprises that you face, various challenges and delays? So, what, what sort of, you know, CapEx increase would have been there?
I think there have been no material project cost overruns. I think there's a lot of... Over the years, there's been a lot of projects that have been added into the scope, rather than any major cost overruns. I think if you go back in time, two, three quarters back, we did talk a lot about it, and there's, I think it should be available. Otherwise, you can connect offline with Vishal if you need further help.
Sure, sir. Definitely, I'll connect with Vishal, and thank you so much. I'll adjourn that. This is from my side of the question.
Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Yeah, hi. Thank you for taking my questions. I have two questions. One, sorry, for getting back on the steel prices, my question. You said that the steel prices are up by around INR 3,000-INR 3,500 versus quarter end. And, given trajectory for realization have been worse than how steel prices fared in third quarter, is it fair to say that if steel prices remain where they are, you would see a much better trend in realization versus this INR 3,000-INR 3,500?
Hi. Can you kindly repeat your question, please?
Sir, what I'm asking is that steel prices, as you said, has increased by INR 3,000-INR 3,500 versus quarter end. That was part-
Okay.
But in the third quarter, your realization trends were weaker than how steel prices fared. So is it fair to say, now that your blast furnace will ramp up and HSM capability will ramp up, your realization trends-
Mm.
-will be much better than the steel prices trend of INR 3,000-INR 3,500?
Yes, you're right, and they'll be in line with the industry. And, I think you're referring to, that incremental thing which, you've been referring to. I know that won't be there. We've realized more than that, and we'll be in line with industry trends as we move forward.
Got it. My second question is more medium-term and strategic. Now that you are ramping up the flat capacity over the past couple of years, you have strategically moved away from export market and focused on the domestic market. And now that EU prices are supposed to move up on back of CBAM, is it fair to say that you would be actively looking at the European market from here over the next 2-3 years?
No. So, you know, we, as you have seen in the past, we are predominantly producing material for the domestic industry with a very strategic focus in the external market. And, you are right, our major market has been European market for plates. Now, with HSM coming in, also the prime focus will be on European market, but that will be around 5%-10% range only.
Got it. Thank you so much. I wish you all the best.
Thank you.
Thank you. The next question is from the line of Tushar Chaudhari from Prabhudas Lilladher Private Limited. Please go ahead.
Good afternoon, sir, and thanks a lot for the chance. Sir, I've missed a few numbers from your initial opening mar- remarks. INR 350 crore you said for one time blast furnace set up cost, and there was a review of INR 189 crore, that was regarding?
The PAT is INR 189 crore for the-
Okay. Okay. So anyways, so that is... For the flat products now we have with all the new setup, BF2F, do we have all the approvals from OEM, like auto and consumer durables, for next few years? We, we, from next two quarters, we will start, improving our product mix.
Yes. So, we are already coming supplies to auto and engineering industry, and, we have necessary approvals from this industry. But then since, our, flat product capacity is more plates than HR, you know, so, it will be more into commercial vehicle segment, earth moving segment, and yellow goods segment. More of it will go into that. We have all the necessary approvals from all these segments, and we already started supplying to the segments.
Okay. Now by next year, I mean, the next quarter, we will be finishing BOF3 also. When will we be in a position to announce next phase of CapEx? Basically, our long-term plan is to take Angul to 25. So any color on that?
... So we are very focused on increasing our utilization on these assets, increasing our EBITDA, EBITDA margins, and increasing our cash flow, reducing our debt to our previous guidances given for the cycle. And at the moment, that's our focus, and we remain committed to that. As and when we make any expansion plans in times to come, we'll definitely make sure that we keep you updated.
Okay. Thanks a lot. Thanks for your concern.
Thank you. The next question is from the line of Pallab Agrawal from Antique Stock Broking. Please go ahead.
Yeah, good afternoon, sir. So, I had a question on, you know, coking coal prices. So, we've seen the spot prices going up to $250 levels. So, do you think it's more of a seasonal, you know, uptick, and probably we should see a correction? Because if they sustain at this level, then we could have a push up in cost in the first quarter of FY 2027, and that would probably offset most of the increase in steel prices. So just wanted your thoughts on that.
So, yeah, these are transient in nature and seasonal impacts that you're seeing here and there. Not any midterm or long-term impact that you're talking about, those, you know, one-off sharp corrections or upticks. Apart from that, I think, on a lot of things, we also have our long-term arrangements as well, and we benefit from those as well.
So how much, you know, part, part of our coking coal be coming from, Mozambique and South Africa, mind, any proportion from there?
About 15%-20%.
Sure. Also, you know, you mentioned that, you know, cost probably in fourth quarter, apart from coking coal, should be flat or similar, but any benefits from the captive power or Utkal Mine opening up, so that can come in?
Since the mine's just been opened up and we're already coming to the near middle of the quarter, to realize any meaningful gains in this quarter, I would refrain from. But yes, in times to come, we'll definitely see benefits.
Sure. Okay. Yeah, thank you, sir.
Thank you. The next question is from the line of Ashish Kejriwal from Nuvama Wealth Management. Please go ahead.
Yeah, hi. Thank you for the opportunity. So first of all, many congratulations for successfully ramping up faster than expected your last furnace as well as BOF capacity. That is commendable. So my question is on the cost part as well as realization.
Sure.
If you look at, you have clearly mentioned about INR 350 crore of startup cost, which could be regarded as one-off. But if you can just give more detail into that, or what could be that, whether one is, one, you have said higher coke consumption as well as the coke ratio. And what else is there, and what do you think that this number could be there in fourth quarter or have been stabilized by December end, yes? That's my first question.
The largest portion of that number is on account of coke, because it's bought out coke at a higher cost. It's a little bit inferior quality to what we produce in-house. And obviously, when you start a furnace, it's too much technical detail, and you can, I think, connect offline with Vishal. But it's a standard process of, you know, starting up a furnace and stabilizing it. I do acknowledge your remark for commending our team for the faster ramp-up than expected. Yes, I do acknowledge that. Thank you for commending the team. And to answer the last part of the question, yes, we've stabilized, and we are at normal industry standard, productivity, KPIs, and especially profit.
So, sir, that means that Q4 Q3, when we are talking about roughly INR 7,000 per ton EBITDA, I think we can begin with INR 8,500 per ton EBITDA, because this is largely over. Is that assumption right?
So, Ashish, Vishal here. We do not-- we actually refrain from giving guidances on EBITDA on a sequential basis, but, I understand where you're coming from. If you look at, as, sir mentioned, you know, about INR 350 crore is the one-off, which will obviously, not recur. And steel prices have moved up, and so has also the costs. By and large, our understanding is that Q4 should be a much stronger quarter in both in terms of volumes as well as in terms of profitability.
No, Vishal, we are not asking about Q4 guidance. I'm just asking the base case that, you know, when we are saying it's one-off, that means we can say, you know, INR 8,500 could be the price, could be the EBITDA for this.
Yeah, yeah. The math is correct.
Okay.
I think, Vishal gave you a good answer, but your math is correct.
That's okay. Second thing is, when we are talking about realization improvement, INR 3,000-INR 3,500 higher, are we taking into consideration the improved product mix also? And when I'm saying improved product mix, where, you know, maybe in third quarter, because of the initial stage, we have given some of, you know, base grade HRC. But now, with this improvement, ideally, our overall realization for fourth quarter should be higher than that of the industry, because third quarter was much lower than the industry standard.
The numbers that I mentioned for the increased realizations are as a scenario right now. I think we're only at the beginning of the quarter. I did mention in one of my earlier answers, that you will see us at industry levels in this quarter. And as we keep ramping up and improving our capabilities, we'll see us beating those numbers again, as in the past.
And lastly, is it possible to share non-steel sales revenue in this quarter versus last quarter? Because I understand, as you rightly pointed out, that lower by-product sales does not affect our EBITDA. But at least on the top line, just to get a sense, how much was the non-steel sales revenue in this quarter versus last quarter? That will be very helpful. Thank you.
Sure. I think, Vishal can help you offline with that, if that helps. You can connect with him.
Sure, we'll do that. Thank you so much, and all the best.
Thanks a lot.
Thank you. The next question is from the line of Siddharth Gadekar from Equirus Securities. Please go ahead.
Hi, sir. Just first, again, on the one-off costs, so when we—just a suggestion here, that when we give our Adjusted EBITDA in the presentation, can we include the numbers? Because every quarter we have a different Adjusted EBITDA, and on the call also, we have a different one-off expenses every quarter in the EBITDA. So it becomes very confusing to understand what is the actual EBITDA per ton. So secondly, in terms of our downstream, what all capacities are left to commission over the next two years?
Siddharth, this is Vishal here. Coming to the second question, over the next 2 years, the downstream capacities are largely commissioned except for CCL 2 and CGL 2. Okay? Thereafter, we have Pellet Plant 2 and DRI 2 are the key capacities. If there are any more production, any more lines that we plan, we'll come back to you. Out of the 2, Q&T furnaces, we've already commissioned 1 of them.
But I think he was asking 2 years. It's not 2 years.
Yeah.
All these capacities are being commissioned as we speak. They're in the final stages of commissioning them. It's not two years. It's only DRI 2 and Pellet Plant 2, which I mentioned earlier in my one of my questions, is slated for FY 2027 end.
Okay.
Thank you. The next question is from the line of Kamlesh Bagmar from Lotus Asset Managers. Please go ahead.
Yeah. Thanks for the opportunity. So, just wanted to get a sense on the product mix going forward. Because, over the last, let's say, prior to this commissioning, we had the benefit of having a rail mill, then your MLSM mill. Those all benefits were there, RUBM. So going forward, don't you think that our earnings would grow primarily because of the volumes and with the lower margins? So what's your sense on that? Because it's like, say, during the call, the questions have been asked that our margins, which was INR 15,000 Q1, in Q1, has fallen down to INR 8,000 odd rupees, adjusted basis INR 8,500 odd rupees. So but going forward, like, say, now we would be having the benefit of the volumes, but our margins would be lesser as compared to the historical levels.
Because if you see in your, like, say, HRC, many of the capacities are coming up, be it Tata Steel or like, say, AMNS is coming with a big capacity. So do you think that now going forward, the play would be on the higher absolute EBITDA, rather than much richer margins as compared to the historical levels?
So the first part of the question, we don't. We actually have moved away from rail or MLSM or, you know, structural-
I'm not saying that you have moved away. I am saying that the share of those products or the volumes have now come down significantly because of these, like, say, flat-based capacities coming in. Because even if I see quarter-on-quarter, your product mix has, like, say, 49% flat, has gone up to 50%, and the HRC mill was commissioned a year ago. So now we're saying that we have sold, lesser grade, HR. So it really doesn't digest with the margins or the realization fall, which we are talking in this quarter.
Okay. So I'll complete my answer. So it's not that we've gone away from those. They remain a core part of our portfolio, and as we speak, we actually keep working on ways to increase those facilities' output as well. Apart from that, the second part of your question is, yes, will these other products increase in our portfolio and our product mix? Yes, they will. But along with that, I think Vishal did mention that we've also added heat treatment furnaces, so those will add capability to our flats portfolio for higher realization, higher value add. Apart from that, as I did mention in one of my earlier questions on the opening statement, that we've just penetrated the market on a higher volume in this quarter.
As we move ahead, our value add percentages and value add products will keep growing, and the realizations will be back on track. So I don't see anything in the mid to long-term future that is of any concern at the moment.
Thank you. The next question is from the line of Raashi from Citi. Please go ahead.
Thank you. First question on your costs. So you indicated that there were startup costs and coking costs, or coking coal costs were also higher.
... So optically, it does appear on a sequential basis that the costs are lower. So one, of course, is the volume benefit, and I imagine lesser value addition. Is there anything else to read into?
I think you've broadly covered it. You've got it pretty much on the ball.
So going forward, we basically expect a reversal of the startup costs, and then we expect higher coking coal prices, simplistically?
Yes, but please also understand that coking cast coke output is increasing because we commissioned the batteries. And as I did mention, that our coke is better quality than what we end up buying from the market, so we'll get some offset gains from that side. And obviously, higher utilizations will also give us some gains in our cost portfolio, so those gains will also be there.
Got it. Secondly, when you indicated that spot realizations are about INR 3,000-INR 3,500 higher than the December quarter, this is your-- you're talking about what you are kind of billing at this point in time, right? On a blended basis, given product mix, everything put together.
Yes. This is the difference in the realization between where the last part of Q3 was and where we are today.
Got it. And for the full year, the CapEx that you had targeted, you had given, you're still holding on to that? Like, no change in CapEx targets for 2026, 2027, 2028?
No, nothing. No change.
Got it. One last question for you. How did the inventory move sequentially?
How does what, sorry?
How did the inventory move sequentially? Inventory. Steel inventory.
Marginally improved or increased during the quarter, but as we speak, it's been unwound as well. There's nothing material in that.
Thank you.
Thank you.
Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.
Yeah, hi, sir. A couple of questions. First is clarification. When we give guidance of sales volumes, should we presume that it is excluding any metallics purchase, be it for this fiscal or next fiscal?
No, yes, there's no metallics purchase.
Okay. And, would it be possible for you to provide a timeline for the SMS, the next SMS?
We've given a guidance already that it's gonna be this quarter, and we are well on track for that.
Okay. Second, can you indicate coking coal on a consumption cost basis, how much would be the increase from Q3 to Q4? I'm sorry if I missed that.
About $18-$28 per ton.
That's helpful, helpful. Just a few more questions. Sir, how do we plan on the evacuation, specifically also, if you could highlight how critical is the Paradip Port over here, given Angul in the east? I'm not very sure, and you did indicate that we have the approvals to supply for HRC. Given the scope of our capacity is very large, how do we plan to sell and evacuate? Some color over here would be quite useful.
Are you talking about evacuation from our plants?
From Angul.
Yeah, so I think that, I think, whatever we're producing, we've been able to evacuate. We have the infrastructure and the capability for that.
So this includes any incremental rail lines, or it's already, there's no problem at all on evacuation?
No, no problem.
Okay. And how critical is the Paradip Port? Because, in earlier calls, we have emphasized about it. How does that fit in, in overall scale of things?
See, I think if you're coming from this expansion phase that we're talking about, and you were talking about at Angul, Paradip Port does not impact anything for Angul capacity expansion, ramp up, et cetera. Paradip Port is a very strategic thing, and it's a longer term play, and it's a benefit that we'll be able to derive for our import and export in times to come. But if you're coming back to the specific on Angul ramp up, there's no effect of Paradip, and nor did we emphasize anything in that.
Perfect. Just to follow up clarification questions, sir, how should we look at Jindal Panther expansion? I think this is the one with the cement entity. I'm not sure whether it's linked with the listed Jindal Steel entity. That's, that's one clarification. And second, I presume there would be some transfer of slag from the listed entity to this very entity. If you could highlight some color on how the transfer pricing mechanism is.
So, this is Sunil Agrawal from Jindal. So basically, Jindal Panther has nothing linked with the Jindal Steel. It is a separate company, and we are independent of Jindal.
Okay, and, and on slag?
Slag, we'll be giving as a transfer pricing as per standard norms if we will supply to them on long-term basis.
... Okay. And just last one, sir, would you just clarify that the ThyssenKrupp bid which Jindal International has basically, the listed entity is completely ring-fenced from it?
Yes, you are right.
Oh, sure. Thank you so much for the answers.
Thank you.
Thank you. The next question is from the line of Rajesh Majumdar from 360 ONE Capital. Please go ahead.
Yeah, good afternoon, sir, and thanks for the opportunity. So I have only one question, actually two, but related. Out of our total capacity of 15 million tons, what is the proportion that will go to the auto industry? That was the first question.
It will be around 3%.
Oh, only 3%? Okay.
Yeah, because we are literally plant out, so we don't have-
Oh.
CRCA or products which are related, which mostly going to auto. So it will be somewhere around 3%.
So the second question is actually less relevant, but I'll still ask it. In the sense that we've seen a lot of headwinds for the auto manufacturers, and Maruti also in the call, actually registered the increase in the steel prices. So there is a chance of a rollback there. So do you think that the auto steel prices will come off a little bit from the at the negotiating level? Yeah, that's it.
No, I won't be able to comment on that.
Yeah. Thank you.
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand over the conference to management for closing comments. Over to you, sir.
Thank you. Q3 FY 2026 was a challenging quarter. Despite the sharp, sharp decline in steel prices and muted demand, we delivered record production and sales volumes. We also commissioned several key projects, most notably synchronizing the 1,050 MW CPP with the grid. The ramp-up of our newly commissioned BF2 and BOF2 facilities is in full swing and is progressively strengthening our operating profile. We expect the fourth quarter FY 2026 to be a stronger quarter, supported by a higher opening volume, improved pricing, and better underlying steel demand. Industry 4.0 and AI remain central to our transformation agenda, enhancing reliability, productivity, and real-time operational control across the value chain. Our key projects are progressing as planned and remain on track for commissioning as per schedule.
Going forward, we will continue to prioritize safe and stable operations, disciplined value creation, and sustainability to deliver value-accretive growth. Once again, thank you for your time on this Saturday afternoon. Have a good day and have a good weekend. Thank you.
Thank you. On behalf of Jindal Steel & Power Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.