Jindal Steel And Power Ltd Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Amit Murarka - Axis Capital Limited - Analyst : Yeah. Hi. Good evening. Thanks for the opportunity. Just on volumes, the first question I wanted to ask is when do we actually see volumes kind of scaling up to cross 2 million tonnes quarterly run rate and go higher particularly given the commissioning that we are planning on the capacities.

Question: Amit Murarka - Axis Capital Limited - Analyst : Towards end of '26.

Question: Amit Murarka - Axis Capital Limited - Analyst : So you mean to say that the new blast furnace that comes up will get fully ramped up by end of '26, right?

Question: Amit Murarka - Axis Capital Limited - Analyst : Okay. Sure. And also I just wanted to check why was there a drop in realization Q-o-Q in the third quarter? I believe the rebar was up roughly 2,000 per tonne on an average basis. Sir, could you help me explain that out?

Question: Amit Murarka - Axis Capital Limited - Analyst : What is the split between flat and long now in third quarter?

Question: Amit Murarka - Axis Capital Limited - Analyst : And what are the semis? Are you clubbing semis into long? There are some semis as well there.

Question: Amit Murarka - Axis Capital Limited - Analyst : Okay. Got it. Sure. I'll come back in the queue. Thank you.

Question: Sumangal Nevatia - Kotak Securities - Analyst : Yeah, good evening. Thank you for the chance. My first question is on the CapEx on slide 27. Now we are seeing a lot of additions to the tune of almost INR15,000 crore, that's almost 50% addition to our stated CapEx of around INR30,000 crore without any addition of capacity. So I just want to know what are the heads where there is a cost overrun. And all these sustainance contingency, we were of the understanding that it's already included in our earlier announcement. So it's slightly coming as a surprise. So if you can just elaborate on this point, please.

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. But if you look at slide number 6, there is no addition of any downstream units. So any tangible unit which you can share as to any different product or different downstream rolling unit which we are putting which will kind of help us understand this better?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. And can you give us some capacity, what color-coating line and galvanizing line we're adding?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Just one follow-up on overall, we do share a quarter-wise timeline. This time, the presentation doesn't include that. So I just want to know where are we with respect to slurry pipeline and BOF two and blast furnace two? Are we on track for the fourth quarter commissioning as we had kind of shared earlier?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Yeah, can I repeat? Can you hear me?

Question: Sumangal Nevatia - Kotak Securities - Analyst : So I just wanted to know we've not shared the regular quarter-wise update in the presentation for different projects. So I just wanted to know where are we with respect to slurry pipeline BOF 2 and blast furnace two, which was earlier expected to come in fourth quarter which is this quarter FY '25?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. Got it. Thank you and all the best, sir.

Question: Indrajit Agarwal - CLSA - Analyst : Hi. Thank you for the opportunity. My question again is on the CapEx. So earlier, you had guided for a mid-teen IRR of the INR31,000 crore CapEx. Now that we have another INR15,000 crore CapEx here, so would we stick to that mid-teen IRR on a INR46,000 crore CapEx total or does that number change this year?

Question: Indrajit Agarwal - CLSA - Analyst : No sir, I understand that. So at INR31,000 crore and at 15.9 million-tonne capacity, we could have arrived at the implied profitability or the increase in profitability or EBITDA through this CapEx. Now that the overall upstream capacity is not rising, would that INR15,000 crore additional means that EBITDA per tonne will be that much more higher to generate mid-teen IRR?

Question: Indrajit Agarwal - CLSA - Analyst : So can you calculate that ROCE? Is there any kind of spread improvement that you build in your assumptions or you are taking current spot spread?

Question: Indrajit Agarwal - CLSA - Analyst : Okay. My second question is on realizations. Can you just explain it again? How much was NSR increased Q-o-Q and how do we end up having a

Question: Indrajit Agarwal - CLSA - Analyst : All right. Thank you. I'll take that offline as well. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Rahul Gupta - Morgan Stanley - Analyst : Hi. Thank you for taking my question. I'm very sorry to harping on this CapEx question again. Just to understand this better, this INR15,000 crore of additional CapEx that would happen over the next three years, how do we look at the IRR of this INR15,000? I understand it would be for sustenance and cost savings, et cetera. But what is the internal math you would have done in terms of benefits both in our revenue side and OpEx side? Thank you.

Question: Rahul Gupta - Morgan Stanley - Analyst : Okay. Thank you so much.

Question: Parthiv Jhonsa - Anand Rathi - Analyst : Thank you for the opportunity and congratulations, sir, for the new role. So my question pertains to the debt. I believe this quarter, the debt has actually gone up significantly compared to last quarter. What will be your expected exit run rate for the current year as far as the debt is concerned?

Question: Parthiv Jhonsa - Anand Rathi - Analyst : Okay. Thank you, sir. So my second question pertains to the coal mine. So what is the quantum of coal? What you have done in this quarter? And are we still on track for the Uktal B1 which was expected in quarter four to come on (inaudible), right? So are we still on track? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Parthiv Jhonsa - Anand Rathi - Analyst : And so what would be the quantum of material excavated during the quarter?

Question: Parthiv Jhonsa - Anand Rathi - Analyst : No. I'm asking from both (inaudible), sir.

Question: Parthiv Jhonsa - Anand Rathi - Analyst : Okay. Because I believe somewhere you had mentioned in Q2 that you have done about 1.3 million tonnes, if I'm not mistaken.

Question: Parthiv Jhonsa - Anand Rathi - Analyst : Okay. Thank you so much, sir.

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : Yeah. Good evening, everyone. I think Mayank-saab mentioned that the iron ore cost had gone up this quarter. So is it possible to quantify what was the increase? And what is the expectation for 4Q? Given that NMDC has taken some price cut, do we expect some benefits in the fourth quarter? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : So last quarter, there was an increase of INR96 per tonne. And next quarter or 4Q, we're expecting a INR100 to INR200 reduction in the cost?

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : Okay. And how are -- have steel prices stabilized broadly per quarter average level? Do we expect some uptick happening or broadly lateralization in the next quarter?

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : Sure, sir. Okay. Thank you, sir.

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : Hi. Good evening, everyone. Sir, quickly two questions. One, on the results, you mentioned that we have seen 1% increase in realization as well as we have a benefit of lower coking coal costs also. Whereas iron ore prices are increased by INR96 or INR100 per tonne. Then why our EBITDA per

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : But sir, will that be meaningful because -- or if you can say what the overall iron ore consumption cost increase that will include your Tensa mines also.

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : That's okay. I was looking at what happened in the third quarter.

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : Okay. I'll take it offline then. Second question is we have been underutilizing our pellet plant for more than one-and-a-half years. And because of which, maybe we are unable to fully utilize our steel plant also at Angul. So I was just trying to get a sense of where we are in that pellet plant utilization stage. As well as what gives us comfort that our blast furnace as well as basic oxygen furnace will be commissioned by March '25? Because before that, we have to do the gas stove blast when it light up. So when can we -- because these are the things which one should look at, otherwise, every time we see a delay in the project, which is not taken appropriate by the investors also. So if you can help us giving that confidence, then it will be great for us. Thank you.

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : Okay. So that means we are operating at maximum capacity? Because what we understood was in the second quarter or maybe November-December, we were operating at 40% (inaudible). Is that right?

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : Okay. And sir what about blast furnace and basic oxygen furnace? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : Okay. And sir, lastly and second one, when we are seeing integrated supply chain project of INR4,500 crore enhancements of projects, all these things, last increase in the CapEx also from INR24 crore to INR31 crore we have included a part of the supply chain project which means that (inaudible) and other things. So what exactly we are having in this integrated supply chain project? Because we are increasing our CapEx by INR16,000 crore, and I'm not sure how much incremental earnings or EBITDA we can generate on the same. So a more elaborate answer on this will be really helpful for us.

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : But sir, these things were already there in INR31,000 crore. So what extra we are doing here that we are unable to get a sense on?

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : So just to conclude that, which means that even if we increase our capacity from 12 million to 24 million, 25 million in Angul later on, we don't have to spend much incremental on the supply chain projects?

Question: Ashish Kejriwal - Edelweiss Capital Limited - Analyst : Understood. Thank you and all the best.

Question: Rajesh Majumdar - Battivala & Karani Securities India PVT. LTD. - Analyst : Good evening, sir, and thanks for the opportunity. So my first question was is there any delay in the slurry pipeline commissioning? And when can we expect the cost savings in the slurry pipeline to start flowing in for us? A realistic date for that?

Question: Rajesh Majumdar - Battivala & Karani Securities India PVT. LTD. - Analyst :

Question: Rajesh Majumdar - Battivala & Karani Securities India PVT. LTD. - Analyst : Okay. My second question -- Yeah, Vishal?

Question: Rajesh Majumdar - Battivala & Karani Securities India PVT. LTD. - Analyst : Yeah. So my second question was on the market opportunity for steel structures for transmission towers. I mean what kind of a capacity do we have in place for this? Because as I understand that there is a huge shortage of your demand in this supply. In this particular category, the number of approved suppliers to fulfill this requirement of expansion for power grid or any other player is very, very less. So are we doing any CapEx on this front? And are we trying to increase the capacity of this particular area? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Rajesh Majumdar - Battivala & Karani Securities India PVT. LTD. - Analyst : Okay. Thank you, sir. Thank you.

Question: Rajesh Majumdar - Battivala & Karani Securities India PVT. LTD. - Analyst : Thank you.

Question: Indrajit Agarwal - CLSA - Analyst : Hi sir. Thanks for the question again. I just want to understand the process for the blast furnace commissioning. So once you have it commissioned, I understand technically, it will take some more time to get it stabilized, get the ramp-up up. But on the customer or sales side, what are the steps? Do you need to first tie up the sales, the customers need to approve the facility, and get it certified, et cetera? So the reason I'm asking is when can we see it actually contributing to sales volume?

Question: Indrajit Agarwal - CLSA - Analyst : So it does not need any kind of certifications or approval. Okay. All right. Thank you.

Question: Satyadeep Jain - Ambit Capital Pvt. Ltd. - Analyst : Hi. Thank you. I know many questions have been asked on this CapEx. I just wanted to drill down further on this. First on the enhancement of projects. I believe I heard the color-coated line, galvanizing, what is -- can you quantify how much is the expansion for color-coated and galvanizing? And Q&T, was it any way a part of -- when the thin slab got rolling, the ACR was changed. Q&T was anyway put in place. I'm not able to understand why is Q&T a new project in this. And what is the color-coated and galvanizing expansion you're looking at?

Question: Satyadeep Jain - Ambit Capital Pvt. Ltd. - Analyst : But the Q&T, this was already a part of INR31,000 crore --

Question: Satyadeep Jain - Ambit Capital Pvt. Ltd. - Analyst : Okay. So you're saying basically, initially, it was only Angul, now you're riding in Raigarh?

Question: Satyadeep Jain - Ambit Capital Pvt. Ltd. - Analyst : Okay. On the supply chain, one, is it possible to quantify how many rigs are you looking at? When you mentioned this Raigarh, how many rigs that you're looking to do at port? In transmission line, I didn't understand. This is transmission line from the (inaudible) project to the plant? Where is the transmission line? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Satyadeep Jain - Ambit Capital Pvt. Ltd. - Analyst : Okay. So you mentioned -- I just want to clarify, there is another slurry pipeline in this enhancement project pipeline?

Question: Satyadeep Jain - Ambit Capital Pvt. Ltd. - Analyst : Okay. Thank you and wish you all the best.

Question: Rahul Gupta - Morgan Stanley - Analyst : Hi. Thanks for the opportunity again and thanks so much for providing additional color on the new CapEx plans. Just one question. This new plan will run through until fiscal '28. So when can we expect the next leg of crude capacity expansion? What's the road map of moving from INR16,000 crore to, say, '25 or beyond fiscal '27? Thank you.

Question: Rahul Gupta - Morgan Stanley - Analyst : Great. Thank you so much and all the best.

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Hi. Thanks for the opportunity. Two quick questions. One is anything that you would like to highlight specifically on raw material (inaudible) both for iron ore and coking coal now and going forward?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Yeah. My question is pertaining to iron ore and coking coal raw material security. Are there any specific variables or strategic road map that you have for both of those to increase raw material sufficiency?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sir, my question was are we looking to increase the percentage of capital sufficiency for iron ore and coking coal going forward versus what we have right now?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Okay. So this is not part of the INR15,000 crore CapEx when we say value-addition, strategic initiatives. This is something (inaudible) about that?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sure, that's helpful. And last data question, if it's possible if you can quantify how much was the metallics purchase on nine-month basis. And given blast furnaces will fire up, what is the incremental cost savings that we are looking at because we will look to substitute this? Any indicative numbers that we can work with?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sunil-ji, the question is over nine months, how much was the external metallics purchase we had? And given as we are looking for blast furnace commissioning which is quite soon, what is the incremental cost saving which will come as we substitute the field with captive furnaces?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : We didn't have any metallic purchases in nine months, is that what we are saying? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 12:30PM, JNSP.NS - Q3 2025 Jindal Steel And Power Ltd Earnings Call

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Okay. Sure. Thank you so much for the answers. All the very best.