Jindal Stainless maintains FY27 volume growth guidance despite Q1 supply hit from West Asia crisis

Jindal Stainless Ltd. (JSL) on Monday reported a modest set of first-quarter earnings despite production disruptions caused by the West Asia conflict, while maintaining its FY27 volume growth guidance of 7-9% as management expressed confidence that operations have largely normalised.

The country's largest stainless steel producer posted a consolidated net profit of ₹769 crore for the quarter ended June 30, up 7.7% from ₹714 crore a year earlier. Revenue from operations rose 10.5% to ₹11,279 crore from ₹10,207 crore, while EBITDA increased 1.5% to ₹1,329 crore. EBITDA margin, however, contracted 100 basis points to 11.8% from 12.8% a year ago as higher input costs weighed on profitability.

Finished goods sales volume declined 7.3% year-on-year to 5,80,805 tonnes after temporary supply disruptions affected production during the quarter.

"The primary reason was the disruption because of the war," managing director Abhyuday Jindal said during the post-results media interaction, referring to shortages of LPG and propane sourced from the Middle East. "Domestic demand is healthy, and even going forward, domestic demand looks to be very healthy."

Capacity utilisation to improve

Chief executive officer Tarun Khulbe said the company had to temporarily curtail production as restrictions on LPG supplies and logistical bottlenecks disrupted fuel availability at its plants. JSL subsequently commissioned piped natural gas at its Odisha facility to reduce dependence on LPG and propane.

Capacity utilisation dropped to around 68-70% during the quarter, but the company expects utilisation levels and production to improve from the current quarter as supply conditions stabilise.

Management added that fuel prices have moderated from their peak, while higher costs for fuel and key raw materials such as nickel and chrome were gradually passed on to customers.

Despite the weak first quarter, the company retained its FY27 volume growth guidance of 7-9%, saying it would revisit its EBITDA guidance in the second half once there is greater clarity on geopolitical developments. JSL also said it deliberately prioritised higher-margin, value-added products over commodity grades during the quarter to protect profitability.

Anti-dumping action, QCO in focus

On policy, Jindal said discussions with the government on anti-dumping duties on stainless steel imports from certain Asian countries are progressing, with authorities expected to appoint verifiers soon.

The company also reiterated its demand for reinstating quality control orders (QCOs), arguing that the suspension of the norms has allowed substandard stainless steel imports into India, hurting domestic manufacturers and raising quality concerns.

"We really feel... it should not get further extended after March 2027," Jindal said, referring to the current suspension of QCOs.

Expansion plans remain on track

JSL said its proposed stainless steel project in Maharashtra's Raigad district is progressing, although land acquisition is taking longer than expected. The company expects to provide greater clarity on the project over the next one to two quarters.

The company is also expanding its green hydrogen programme, with a 600 Nm³ hydrogen plant at its Jajpur facility scheduled for commissioning this month, which will later be doubled to 1,200 Nm³. Its Indonesian operations, meanwhile, are operating at around 80-85% capacity utilisation, supported by investments across the nickel value chain.

On exports, management said the increase in export contribution to 11% of sales was largely due to lower domestic production rather than a strategic shift. While tighter European Union quotas are expected to reduce shipments to the region, the company plans to offset the impact by expanding exports to markets such as Japan, South Korea, Brazil and Mexico. It also ruled out any immediate acquisition plans but said it continues to evaluate quality assets that can strengthen its specialty stainless steel business.