Earlier this month, JSW Steel reported its results for the second quarter ended September 2025, posting an impressive 307% YoY surge in its consolidated profit after tax (PAT) at Rs 1,646 crore, while its revenue from operations recorded a 12% YoY growth.
The revenue from operations stood at Rs 42,149 crore in Q2FY26, up from Rs 37,496 crore posted in the year-ago period. However, the company noted that its Q2 PAT was 25% lower on a QoQ basis.
Adjusted EBITDA rose 39% year-on-year (YoY), supported mainly by higher volumes and lower costs of iron ore, coking coal, and power, though partially offset by a decline in realisations. Reported EBITDA for the quarter stood at Rs 7,115 crore.
According to the company’s press release, domestic sales reached 6.33 million tonnes in Q2 FY26, marking a 14% YoY and 6% quarter-on-quarter (QoQ) growth. Exports surged 89% YoY and 56% QoQ, accounting for 10% of total sales from Indian operations during the quarter. Meanwhile, retail sales volumes rose 26% YoY and 13% QoQ.
Consolidated crude steel production in Q2 FY26 hit a record high of 7.90 million tonnes, registering a 17% YoY increase. The growth was driven by optimal operations at the Dolvi plant following a planned maintenance shutdown in Q1 FY26, along with the ramp-up of JVML and BPSL expansions. Consolidated sales stood at 7.34 million tonnes, up 20% YoY, supported by higher production volumes.The company’s net debt-to-equity ratio stood at 0.93x as of September 30, 2025, compared with 0.95x at the end of Q1 FY26. Net Debt to EBITDA improved to 2.97x from 3.20x in the previous quarter. Net debt as of September 30, 2025, was Rs 79,153 crore, reflecting a reduction of Rs 697 crore compared to June 30, 2025.InCred Equities maintained its Reduce rating on JSW Steel, with a target price of Rs 939 per share, flagging that the company’s valuation “defies gravity.” The brokerage noted that JSW Steel’s current trading level — nearly 4x its FY26F book value — is far above any reasonable benchmark for a cyclical commodity business. Despite repeated earnings misses and narrowing spreads, the stock remains buoyant, driven more by investor confidence in management and India’s long-term steel demand outlook than by underlying fundamentals.
InCred also raised concerns about balance sheet discipline, pointing out that net gearing remains above 75%, with operating cash flows continually reinvested into expansion rather than reducing leverage or enhancing shareholder returns. The brokerage believes this aggressive growth strategy, while operationally impressive, limits the potential for balance sheet strengthening or higher payouts, reinforcing its cautious stance on the stock.
JSW Steel shares have risen 33% year-to-date.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)