West Asia conflict weighs on Jindal Stainless' Q1 sales, says MD

Jindal Stainless Ltd (JSL) on Monday reported a 7.6 per cent year-on-year (Y-o-Y) increase in consolidated net profit for the first quarter of financial year 2027 (FY27), as higher realisations and a richer product mix helped offset a production disruption caused by industrial gas shortages following the West Asia crisis.

 

The country’s largest stainless steel producer by revenue posted a consolidated profit after tax (PAT) of ₹769 crore for the quarter ended June 30, compared with ₹715 crore a year ago. Revenue from operations rose 10.5 per cent to ₹11,279 crore, while earnings before interest, tax, depreciation and amortisation (Ebitda) rose 1.5 per cent to ₹1,329 crore.

 

 

Finished goods sales volumes, however, declined 7.3 per cent year-on-year to 580,805 tonnes after disruptions in the availability of LPG and propane forced the company to temporarily curtail production.

 

“The primary reason was the disruption because of the war. We depend a decent amount on LPG and propane, most of which comes from West Asia. The initial few weeks of the quarter saw severe disruptions in our production,” Managing Director Abhyuday Jindal said during a post-results media interaction, adding that domestic demand remained healthy and the decline in volumes was entirely supply-driven.

 

Chief Executive Officer Tarun Khulbe said both the Odisha and Hisar plants were affected as restrictions on LPG availability and logistical disruptions constrained operations. The company has since commissioned piped natural gas at its Odisha facility, helping normalise production, although the geopolitical situation remains uncertain.

 

The disruption pulled capacity utilisation down to around 68-70 per cent during the quarter, but management said utilisation is expected to improve from the second quarter as operational challenges ease.

 

Despite lower production, profitability remained resilient as the company shifted its sales mix towards higher-value products. Jindal said the company deliberately reduced exposure to lower-margin commodity grades and prioritised supplies to higher-margin customer segments to protect margins during the disruption.

 

The company said demand remained robust across automobiles, railways, infrastructure, manufacturing and consumer sectors, while sales of specialised grades for the power and oil and gas sectors also increased. Exports accounted for 11 per cent of total sales during the quarter, compared with 9 per cent a year earlier.

 

Management clarified that the higher export share did not reflect a strategic shift towards overseas markets. Export volumes remained broadly unchanged, with the higher percentage resulting from lower domestic production during the quarter.

 

Looking ahead, the company retained its FY27 volume growth guidance of 7-9 per cent, saying it would reassess its earnings outlook in the second half if geopolitical conditions become clearer.

 

On exports, Jindal acknowledged that the European Union's tighter safeguard quotas would reduce shipments to Europe, but said the company expects to offset the impact by expanding sales to markets such as Japan, South Korea, Brazil and Mexico.

 

Commenting on trade policy, Jindal said discussions with the government on quality control measures and anti-dumping action against stainless steel imports from certain Asian countries are continuing. He said the industry expects the government to appoint anti-dumping verifiers soon and hopes the temporary suspension of the Quality Control Order (QCO), currently valid until March 2027, is not extended further.

 

Khulbe said fuel prices have moderated from the peak seen during the West Asia crisis, although key raw materials such as nickel and chrome continue to remain volatile. The company continues to pass changes in input costs to customers with a time lag.