BPSL issue one-off, will weigh opportunities on merit: JSW Steel's Acharya

The control (BPSL) is still with us currently. At present, we are focusing on the opportunity of looking at all legal remedies

JSW Steel’s performance in Q4FY25 reflects an improved pricing environment and increased volumes. In an audio interview, JSW Steel Joint Managing Director and Chief Executive Officer, Jayant Acharya, tells Ishita Ayan Dutt that the company is on track with its expansion plans and will look at acquisition opportunities that make strategic sense. Edited excerpts:

 

The acquisition of BPSL has seen many twists and turns. There was attachment of assets by the ED and finally the Supreme Court (SC) order rejecting your resolution plan and ordering liquidation. As an investor, would this deter you from bidding for IBC assets?

 

This is probably a one-off. We will look at each asset on merit and then take a view as to what it holds for us strategically and structurally. We have many opportunities within, for expansion. We will certainly pursue those. But if there were to be a compelling opportunity, we can always look at it.

 

You have filed an appeal against the SC order in BPSL. On what grounds?

 

I will not be able to give you the details because it is sub judice. But I just want to reiterate that the plan was implemented in full compliance with the law. And we have been able to take steps to build the operations and get it to its present status today.

 

We believe that there are strong grounds for us to seek legal remedies and will certainly explore all available legal remedies.

 

You still have control of the asset?

 

There are control events which are defined. The control is still with us currently.

 

So, you will give up control when lenders refund the money?

 

There are steps outlined in the judgment. In case the legal remedies don't go through or the refund happens, those are steps that will have to be kept in mind. But these are hypothetical questions. At present, we are focusing on the opportunity of looking at all legal remedies. And we will be following up on those for now. 

Have you already sent demand notices to lenders of the erstwhile CoC of BPSL?

 

There is a process defined in the plan, by virtue of which you need to send a communication to the CoC, which has been done. And we have also sent a request for extending the timeline so that appropriate legal remedies can be analysed and taken up.

 

Quarter-on-quarter net profit has seen a big jump of 109.6 per cent. Is the worst over for steel prices?

 

We had a very good operational performance in the last quarter driven by Indian operations, especially with the JVML (JSW Vijaynagar Metallics Ltd) ramp-up. We improved production at BPSL in Q4 and delivered the highest production and sales for the quarter.

 

Domestic sales where we refocused the last two years, yielded dividends. The earnings before interest, taxes, depreciation, and amortisation (Ebitda) of Indian operations grew by ₹872 crore, which contributed to the overall performance.

 

But the actual benefit of JVML operations in terms of cost will play out in the coming quarters. The US operations also reversed its losses – Baytown went into a positive and the Ohio unit reduced losses by half.

 

Prices in the US have increased significantly since the tariff action. How will it play out for Ohio?

 

We are already seeing improved performance. That gives us the confidence that the US operations will contribute to the overall Ebitda this year. The Italian operation is in the process of signing a bilateral rail agreement with Italian rail and that will improve the volumes and also Ebitda. In all, the overseas operations will contribute positively to JSW Steel Ebitda.

 

What is your capex plan for FY26?

 

Our capex plan for FY26 will be about ₹20,000 crore. We are building volumes in terms of overall steel capacity expansion. And at the same time, we are engaging in our downstream expansion to be able to provide value to the entire system.

 

Do you see a better FY26 than FY25?

 

Certainly. We have guided 30.5 million tonne (mt) production and 29.2 mt sales volume. The pricing environment has improved –  Q4 to Q1. I see an improvement of about ₹3,250 per tonne on an average basis. It is a good relief from the lows of December and January. Our coking coal costs have come down by $15 per tonne and we see another $10-$15 drop in Q1. And the safeguard duty has been very helpful.

 

JVML operations will have significantly lower (conversion) cost once it stabilises. As it ramps up, we see a difference of at least 2,500 per tonne from the average of our other existing operations of our hot rolled coils. And overseas subsidiaries will contribute positively.

 

Do you think you will achieve your target of 50 mt capacity by FY31?

 

Yes. The Dolvi expansion along with the Vijaynagar expansion will up our capacity by 7 mt. With some incremental debottlenecking at other locations, we should be very close to 42 mt.

 

After that, we have opportunities in Vijaynagar for JVML expansion by another 5 mt and Salav by about 4 mt, which will take our capacity to 50 mt in India. We also have opportunities to look at Paradeep (Odisha) and Gadchiroli (Maharashtra).