JSW Steel (500228) Oct 2025 Filing Analysis

Use AI and digitalisation to reduce hot-metal cost and unplanned downtime. — target: Potential savings of approximately ₹45 per tonne of hot metal and avoidance of approximately 25,000 hours of unplanned downtime

Exports expanded from 7% to 10% of Indian sales, with export volume rising from roughly 0.39mt to 0.74mt. This indicates a growing international sales channel, although it remains smaller than domestic sales. (2 expanding)

The cost advantage strengthened in the latest quarter. Indian operations benefited from lower coking-coal prices, lower iron-ore and coking-coal consumption, and lower power costs due to greater renewable-energy use and efficiency. Adjusted EBITDA increased from ₹5,639 crore to ₹7,614 crore, although the company does not disclose a comparable cost-per-tonne figure. (1 expanding)

Domestic sales remained the core channel but declined as a share of Indian sales from 93% to 90%. Absolute domestic sales still grew 14% YoY to 6.33mt, so the contraction is a mix shift caused by faster export growth, not weakening domestic volume. (1 shifted, 1 contracting, 1 expanding)

The retail network is expanding steadily, while sales growth is accelerating. JSW had approximately 20,100 stores across 1,909 towns and added 52 branded stores in H1 FY26, taking branded stores to 2,390. Retail sales increased from 1,907 kt in Q2 FY25 to 2,126 kt in Q1 FY26 and 2,411 kt in Q2 FY26; year-on-year growth accelerated from 26% in the latest quarter after strong sequential growth. The distribution footprint supports continued geographic reach across urban, semi-urban and rural India. (2 accelerating, 2 steady across 4 signals)

JSW One continues to scale quickly, with steady-to-strong growth across transactions, steel, cement and credit. GMV rose from ₹2,578 crore in Q2 FY25 to ₹3,919 crore in Q1 FY26 and ₹3,952 crore in Q2 FY26. Year-on-year GMV growth was 43% in Q2 FY26, while steel volume grew 53% and credit grew 30%. Growth remains healthy, but the quarter-on-quarter GMV increase was modest after the large year-on-year expansion. (1 steady, 1 accelerating, 1 new trend across 3 signals)

The risk is STABLE overall. Q2 FY26 revenue growth depended mainly on volumes because lower net selling prices partly offset the benefit of higher shipments. The EBITDA bridge shows a negative ₹1,915 crore impact from net selling prices, partly offset by ₹1,090 crore from costs. This confirms continuing margin sensitivity, but the cost benefit broadly offset the price pressure in the latest quarter. Therefore, the risk remains high but has not clearly worsened from the previous assessment. (1 stable)

The risk remains high and is best classified as STABLE. The current presentation still describes global steel prices as subdued because elevated Chinese exports offset the benefit of Chinese production cuts. However, the latest quarter also showed strong Indian demand and no direct deterioration in JSW's volumes. Q2 FY26 consolidated sales rose 20% year on year to 7.34 mt, while revenue rose 14% year on year, although lower selling prices partly offset volume growth. Compared with the previously identified concern about weak Chinese demand and falling prices, the evidence does not show a clear worsening in the current quarter. (1 stable, 2 easing, 1 insufficient_data)