JSW Steel Q2: Strong volumes boost profit, analysts stay cautious

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JSW Steel reported a robust 269.7 per cent year-on-year (Y-o-Y) jump in consolidated net profit to ₹1,623 crore in Q2FY26, driven primarily by higher sales volumes that offset a decline in realisations. In the same quarter last year, the company had posted a net profit of ₹439 crore. On a sequential basis, however, net profit fell 25.7 per cent.

 

The firm’s consolidated revenue rose 13.8 per cent Y-o-Y to ₹45,152 crore from ₹39,684 crore in Q2FY25, surpassing Bloomberg’s estimate of ₹44,170 crore. Sequentially, revenue grew 4.6 per cent. Consolidated adjusted Ebitda was reported at ₹7,849 crore, up 39 per cent Y-o-Y, supported by higher production volumes and lower iron ore, coking coal, and power costs. Reported Ebitda stood at ₹7,115 crore.

 

JSW Steel’s crude steel production reached an all-time high of 7.90 million tonnes (mt), up 17 per cent Y-o-Y, following the Dolvi plant returning to optimum capacity post-Q1FY26 maintenance and ramp-ups at JSW Vijayanagar Metallics Ltd (JVML) and Bhushan Power & Steel Ltd (BPSL). Domestic sales stood at 6.33 mt, a 14 per cent increase Y-o-Y and 6 per cent quarter-on-quarter (Q-o-Q), while exports rose 89 per cent Y-o-Y and 56 per cent Q-o-Q, contributing 10 per cent of Indian operations’ sales. Retail sales volumes expanded 26 per cent Y-o-Y and 13 per cent Q-o-Q. Net debt as of 30 September 2025 declined slightly to ₹79,153 crore from the previous quarter.

 

On the macro front, JSW Steel highlighted that global growth in 2025 remained resilient, aided by front-loaded trade flows and pre-tariff consumption. The outlook for 2026, however, remains cautious, with elevated tariffs and geopolitical uncertainties expected to temper momentum. In India, the company anticipates continued economic support, with GST reforms likely boosting consumption in automobiles and consumer durables during H2FY26.

 

Meanwhile, on the bourses at 9:20 AM, JSW Steel share price was trading 0.28 per cent lower at ₹1,159.50 per share. By comparison, BSE Sensex was trading 0.8 per cent higher at 84,620.90 levels.   Track Stock Market Live Updates

Brokerage commentary

 

Nuvama noted that JSW Steel delivered better-than-expected consolidated adjusted Ebitda of ₹7,850 crore, largely flat Q-o-Q. Volume growth of 10 per cent Q-o-Q and lower raw material costs helped offset a 5 per cent fall in blended realisation in Indian operations. Indian operations’ adjusted Ebitda declined slightly by 0.8 per cent Q-o-Q to ₹7,610 crore, with adjusted Ebitda per tonne falling ₹1,165 to ₹10,769. 

 

Overseas operations Ebitda dropped 14 per cent Q-o-Q to ~₹160 crore. Nuvama expects steel prices to rise by ₹3,500-4,000 per tonne in November-December, lifting Q3FY26E Ebitda per tonne by up to ₹1,000. The brokerage trimmed FY26E/FY27E Ebitda by 2 per cent and rolled forward its target price to ₹1,050 from ₹977, maintaining a ‘Reduce’ rating.

 

Centrum Broking highlighted that Q2FY26 net sales and Ebitda were broadly in line with consensus estimates at ₹44,600 crore and ₹7,100 crore, respectively. While net debt stood at ₹79,200 crore, recent Supreme Court approval of JSW’s resolution plan for BPSL was a key positive. Centrum expects volume growth to remain healthy, supported by domestic demand, capacity ramp-ups, and utilisation gains. Steel prices are likely to recover in November-December, though coking coal costs may rise modestly. With the stock trading at elevated valuations, Centrum resumed coverage with a ‘Neutral’ rating and a target price of ₹1,114, based on 7.5x September 2027E EV/Ebitda.

 

JSW Steel’s Q2FY26 results were marked by record production and strong volume-led profits, but sequential net profit decline and cautious global outlook have led brokers to adopt a measured stance.