JSW Steel plans to grow its capacity and secure raw materials to boost future performance. The company got results in line with expectations for Q2FY27. It started sourcing coal from Mozambique and Australia to improve cost competitiveness. Many new speciality products will help the firm capture more market demand soon.
JSW Steel (JSTL) has followed a consistent strategy of capacity expansion while also working to secure sourcing for coal, iron ore, coking coal, among others. The Q2FY27 results were in line with consensus, and the company has increased its capex commitment and reiterated guidance. Backward integration involves tying up coking coal supplies from Mozambique and Australia (for about 15 million tonnes per annum, or mtpa), as well as setting up washeries and sourcing from captive iron ore mines, which will cover 50 per cent of requirements. The upstream portfolio is expanding to include speciality products like CRGO (cold-rolled grain-oriented) steel, CRNO (cold-rolled non-oriented electrical) steel, tinplate, bearing steel, alloy steel, rails, and so on. Assured raw materials and more blast furnace capacity should improve operating leverage and enhance cost competitiveness. Steel is expected to have a long upcycle, given the demand created by long-term public capex commitments to infrastructure. JSTL is looking to capture the realisation upside and grow volumes as well.