jindal steel & power ltd share price Management discussions


1.1 Global Economic Overview

Amidst a year marked by overlapping challenges such as the Russia-Ukraine conflict, intermittent shutdowns in China due to the continued spread of multiple variants of COVID-19, high inflation, and consequent monetary policy tightening, the global economy demonstrated remarkable resilience and positive signs of recovery. During 2022, global real GDP experienced robust growth of 3.4%, surpassing expectations. Notably, growth in several major economies was stronger than anticipated, with the reopening of the economy in China and resilient consumption in the US. Emerging and developing economies successfully navigated challenges driven by fiscal support and domestic consumption.

Indias Growth Story Continues

The Indian economy achieved a growth of 7.2%, beating projections of the RBI, in FY 2022-23. Overall, India continues to have a fundamentally sound growth story. India is now the fastest-growing economy among major economies.

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The easing of supply chain bottlenecks, the fall in transportation costs, and the reopening of Chinas economy created favourable conditions for key sectors of the global economy to rebound. The supply chain shocks in energy and food markets caused by the Russia-Ukraine conflict are receding. Simultaneously, the synchronous tightening of monetary policy by most central banks is starting to bear fruit, with inflation moving back toward targeted levels. Infiation has already reached its peak in the United States and Europe in early 2023, and it has started to decline in other significant economies, such as Japan, China, and India. Infiation in the US peaked at 8% in 2022 and is likely to taper down to 4.7% in 2-23 as both fuel and consumer price inflation subsides. The Eurozone also experienced inflation of 8.4% in 2022 and is likely to almost halve to 4.5% in 2023.

Global Core Infiation has Peaked

1.2 Advanced Economies (AE)

Growth in Advanced Economies is estimated to have grown by 2.7% in 2022, supported by resilient labour markets and robust consumption expenditure. In the US, the economy expanded by 2.1% and made significant progress in reaching pre-COVID levels across key economic indicators. The Euro area demonstrated even more robust growth, with GDP increasing by 3.5%. This growth was attributed to favourable factors such as lower natural gas prices and accommodative fiscal policies benefiting both businesses and households. However, growth rates are expected to taper as the headwinds of continued conflict between Russia-Ukraine and the slowdown in China weighs on the economic recovery globally.

AE Growth Forecast


2022 (E) 2023 (P) 2024 (E)

Advanced Economies

2.7 1.3 1.4
United States 2.1 1.6 1.1
Euro Area 3.5 0.8 1.4
Germany 1.8 (0.1) 1.1
France 2.6 0.7 1.3
Italy 3.7 0.7 0.8
Spain 5.5 1.5 2.0
Japan 1.1 1.3 1.0
UK 4.0 (0.3) 1.0
Canada 3.4 1.5 1.5
Other Advanced Economies 2.6 1.8 2.2
Source: IMF WEO April 2023

Note: E stands for estimates and P stands for projections

1.3 Emerging Market and Developing Economies (EDME)

Emerging Market and Developing Economies experienced steady growth and are estimated to have grown by 4.0% in 2022. Economic prospects are on average stronger than for advanced economies, but these prospects vary more widely across regions. The reopening of the domestic economy in growth in China and the resilience of Advanced Economies provided external demand support for many countries, contributing to their positive economic performance. Notably, China has announced a GDP growth target of ~5% for 2023. The Chinese economy grew at 4.5% and 6.3% in the first and second quarters of 2023 respectively. The country is likely to surpass its target growth by a healthy margin as per various estimates by IMF, World Bank, and others. Additionally, the Chinese governments emphasis on implementing policies aimed at infrastructure investment and domestic consumption suggests an increased likelihood of China achieving this target. This should help improve sentiments for global commodities growth as China, plays a pivotal role in almost all global commodities.

EMDE Growth Forecast


2022 (E) 2023 (P) 2024 (P)

Emerging Market and Developing

4.0 3.9 4.2


Emerging and Developing Asia

4.4 5.3 5.1
China 3.0 5.2 4.5
India 6.8 5.9 6.3

Emerging and Developing Europe

0.8 1.2 2.5
Russia (2.1) 0.7 1.3

Latin America and the Caribbean

4.0 1.6 2.2

Middle East and Central Asia

5.3 2.9 3.5

Sub-Saharan Africa

3.9 3.6 4.2

1.4 Outlook

According to the OECD economic outlook, economic indicators such as global output PMI, industrial production, and retail sales are showing signs of improvement in early 2023, with global GDP growth pegged at a YTD rate of ~3%. This improvement is primarily driven by the sharp fall in energy prices and improved growth prospects from Chinas economy reopening. Other factors include the easing of pressure in supply chains across the world. According to the IMF, global inflation is projected to decrease from 8.7% in 2022 to 7.0% in 2023.

The Impact of Chinas Economic Re-opening

An additional factor that is expected to shape global growth in 2023 is the pace of Chinas reopening rebound. A strong Chinese economy is likely to raise the forecast of global growth due to its substantial size. Additionally, given Chinas significant dependence on imports, the reopening is likely to generate positive spillover effects for the rest of the world.

According to the IMF, the global economy is likely to grow at 2.8% and 3.0% in 2023 and 2024 respectively. As the economic shocks that have shaped growth over the last few years recede, the overall economic scenario has started to converge toward the pre-pandemic growth path in many economies.

A notable factor that is expected to shape growth in 2023 is the trend of governments worldwide taking a more proactive approach to an industrial policy that seeks to give the state renewed prominence in national and global economic development. For example, China has been selectively infusing stimulus in to the economy through various measures such as reduction in policy rates, and higher tax incentives among other measures to stimulate growth. Other examples of the same include the USs $280 billion CHIPS and Science Act, the PLI Scheme in India, and the European Green new deal among others. As a result, this trend is expected to promote industrial development in essential public goods such as infrastructure and prioritise industries of growing importance such as renewable energy.

1.5 Prices

1.5.1Input Prices

Crude Oil

In 2022, crude oil prices exhibited significant volatility. In the first half of the year, prices surged due to tightened supply conditions caused by the Ukraine-Russia conflict, with the international benchmark Brent reaching US$139.13 per barrel, the highest level since 2008. However, as fears of supply shocks receded, oil prices have also returned to normalised levels. A clear focus on alternative and renewable sources of energy is likely to drive down the oil demand even further as economies especially Eurozone starts investing heavily in renewables. Recovery in energy consumption post-pandemic driven drop faded due to the Russia-Ukraine conflict forcing global economies to find short-term alternates to Oil/NG and building long-term viable renewable energy solutions.

Source: World Bank

According to the IEA, the average annual oil demand growth rate is forecasted to decrease from 2.3 mb/d in 2022 to 2 mb/d in 2023, resulting in an estimated global oil demand of 102 mb/d. As a result, the price of Brent crude oil is expected to average US$92 per barrel in 2023—well above the five-year average of US$60 a barrel. A short-term spike in oil and NG prices is likely fallout from the continued conflict between Russia-Ukraine. However, a strong global focus on renewables is likely to bring down the long-term oil demand significantly. The Infiation Reduction Act in the US, RE Power EU plan, the Fit for 55 package from the EU, FX Green Transformation initiative in Japan, and the Climate Action Bill in Australia are some of the leading transformative changes that should bring down the demand for oil in the long run. While renewable energy sources will take time to replace oil in a fundamental way, the volatility in crude prices will impact the global economy and consequently the steel industry.


In 2022, global coal consumption reached an all-time high, driven by India and China. The energy crisis caused by the Ukraine-Russia conflict led to an increased dependence on coal for power generation, resulting in record-high consumption levels in August and September. As a result, coal prices remained significantly higher than their five-year trailing average throughout 2022. However, coal prices are expected to fall sharply as supply-chain re-routing for coal is complete.

Coal, Australian Coal, South African Source: World Bank

Both thermal coal price and demand are expected to decline in the medium term, as indicated by the significantly lower coal future prices for 2023 in comparison to 2022. In the short term, it is important to monitor geopolitical risks and the growth trajectory of China as in_uential factors in the coal market. The demand for thermal coal is likely to fall globally and the de-growth is likely to accelerate as alternatives such as renewable energy picks pace.

Coking Coal

During 2022, Coking coal prices reached record highs in the first half of the year with the onset of the Russia-Ukraine conflict. As supply-chain re-routed, prices moderated in the latter part of the year, however, they remained elevated compared to historical levels. Additionally, the La Ni?a weather conditions experienced in the previous year affected Australian miners ability to meet production targets and contributed to the rise in prices. PHCC FOB Australian prices fluctuated between US$188 per tonne and US$670.5 per tonne, representing significant volatility compared to the prices observed in 2021.

Source: Steelmint

Demand for coking coal used in blast furnaces is unlikely to decline significantly unless a techno-economically viable alternative is found. Demand for coking coal in the short term is likely to stay strong on increased demand from India and China.

Iron Ore

In 2022, iron ore prices experienced a decline from the elevated levels observed in 2021. This is attributable to a decrease in global steel production and construction activity, resulting in reduced demand for iron ore. Furthermore, the resurgence of COVID-19 and consequent lockdowns in China, which represents 70% of global seaborne iron ore consumption, contributed to a further dampening of demand in the market. As China continues to limit steel production in 2023 to 2022 levels, the demand and consequently price for iron ore is likely to decline which augurs well for steel producers.

Source: Steel Mint

In the short term, iron ore prices are expected to rise in the first half of FY 2023-24 due to renewed optimism about demand from China. However, over the medium to long term, the prices are anticipated to decline due to a mismatch between demand and supply. New production facilities are set to commence operations in Australia, Brazil, and Africa while China is likely to limit steel production in 2023 to 2022 levels, leading to a sharp decline in the second half of 2023 iron ore imports and consumption which could impact iron ore prices.

1.5.2Output prices

International Steel prices

The start of the year witnessed elevated international steel prices. However, they started to decline in May and reached a low in November 2022. This downward trend was attributed to various factors, including the lockdown measures implemented in China, concerns about a global economic slowdown, and a decline in iron ore prices. Towards the end of the year, international steel prices began to rise once again, primarily driven by elevated input costs, especially for iron ore. In the near-term steel prices are likely to remain range bound as re-opening of China remains a key to demand for commodities.

China HRC export FoB ($/T) and India HRC export FoB ($ per Tonne)

1.6 Indian Economic Overview

2022 was a landmark year of the economy, as it become the fifth-largest economy in the world. Amidst an uncertain global economic scenario, the Indian economy is estimated to have grown by 7.0%, beating expectations in FY 2022-23. As per the latest RBI forecasts, India is set to grow at 6.5% during FY 2023-24 up from its previous forecast of 6.4%. This, after a strong growth of 7% in the previous year augurs very well for domestic steel consumption.

Unlike other economies, Indias growth was not entirely dependent on fiscal stimulus but was driven by stronger than anticipated private consumption, a recovery in business sentiment, and structural interventions implemented by the Government of India. The resurgence in consumption was strengthened by the release of pent-up demand, a widespread phenomenon observed globally. This trend was evident not only in the housing market but also in the construction sector, which experienced noticeable growth in FY 2022-23. The substantial increase the central governments Capex played a significant role in driving expansion. The government, in its budget for FY 2023-24, announced to 10 lakh crore. In addition, the capital outlay for Indian railways for 2023-24 has been the highest ever at 2.4 lakh crore. A massive 69% hike the PM Awaas Yojna scheme to 79,000 crore was also announced. These among many other incentives, schemes have taken resulted in a massive boost to the growth of the infrastructure and construction sector in India

Private consumption – Highest since FY 2014-15

Navigating Infiation in 2022

Mean headline inflation stood at 6.7% in FY 2022-23, resulting from higher commodity prices and adverse weather conditions. After reaching a peak in April 2022, inflation has eased with improvement in supply chain conditions and the strategic and agile approach of the RBI. Notably, the RBI was successful in combatting inflation by raising the repo rate by 250 basis points from May 2022 to February 2023.

Lastly, high-frequency indicators such as the IIP, GST collection, and the PMI, all point towards the resilience of the Indian economy, which has made a swift recovery from the impact of the pandemic. Details on the same can be found below.

1.7 High-Frequency Indicators (FY 2022-23)

High-frequency data such as GST collection, toll collection, and issuance of e-waybills all indicate a very healthy growth of the economy. GST collection continues to grow as economic activities pick up. GST collection for Jun23 was at 1.61 lakh crore, up 12% YoY. This was the highest ever monthly collection, barring the month of Apr22 and April23. In terms of manufacturing PMI, the index continues to remain robust at above 55 for the last six months consecutively, demonstrating strong confidence in the manufacturing activities in the country. With such high manufacturing PMI, strong GST collection, and high government spending, the outlook for steel demand remains robust.

1.8 Outlook

Indias growth story remains fundamentally strong, propelled by strategic interventions from the government and relatively lower dependence on foreign demand. The governments Capex, amounting to 3.3% of GDP is anticipated to crowd in private investments and spur an increase in output through the multiplier effect. The robust balance sheets of Indian corporations and banks serve as additional catalysts, bolstering the momentum in private investments. These favourable conditions, combined with other factors, are expected to contribute to a projected real GDP growth rate of 6.5% in FY 2023-24. Additionally, the government is expected to remain focused on bridging the infrastructure gap and promoting technologies and investments that align with Indias 2070 net-zero target. Downside risks posed by inflation have moderated with a fall in global commodity and food prices. The cumulative increase in policy repo rate by 250 bps, a stable exchange rate, and a normal monsoon, is expected to steer the inflation trajectory down to 5.2% in FY 2023-24 from the average of 6.7% witnessed in FY 2022-23.


2.1 Global Steel Industry

According to the WSA, global steel demand stood at 1,796.7 MT in 2022. Steel demand in the Advanced Economies declined by 1.7% in 2022, after recovering 16.4% in 2021 from the significant dip caused by the pandemic. This downward trend in steel demand can be attributed to the persistent impact of high inflation and rising global interest rates, which have exerted pressures on developed economies. Another notable factor was the high volatility in raw material prices, especially coking coal, on account of tightened supply chain conditions and the Ukraine-Russia conflict. On the supply side, total world crude steel production was 1,878.5 MT, a 4.2% decline compared to 2021, as geopolitical tensions increased, and demand was muted. China, the worlds largest steel producer, recorded production of 1,013 MT in 2022, a 2.1% YoY decline due to lower demand as numerous variants of COVID-19 continued to impact its economy and its ‘Zero-COVID policy resulted in lower economic activities and consequently reduced steel demand. Meanwhile, Japans steel production fell by 7.4% YoY to 89.2 MT, which was partially offset by a 5.5% YoY increase in Indias production to 124.7 MT.

Steel Production, Top 10 Countries


2022 (MT) 2021 (MT) YoY growth (%)
1 China 1,013.0 1,034.7 (2.1)
2 India 124.7 118.2 5.5
3 Japan 89.2 96.3 (7.4)
4 United States 80.7 85.8 (5.9)
5 Russia (e) 71.5 77.0 (7.2)
6 South Korea 65.9 70.4 (6.5)
7 Germany 36.8 40.2 (8.4)
8 Turkey 35.1 40.4 (12.9)
9 Brazil 34.0 36.1 (5.8)
10 Iran 30.6 28.3 8.0

2.1.1 Outlook

Similar to the global economic scenario, the adverse factors that influenced the global steel industry are subsiding. Encouraging developments, such as Chinas reopening and the alleviation of supply chain pressures are expected to drive a YoY increase of 2.3% in global steel demand, reaching 1,822 million metric tons (MT) in 2023 according to the WSA. Additionally, Chinas steel demand is projected to experience a 2% YoY growth, primarily driven by the anticipated robust recovery of the Chinese economy. Conversely, the European steel demand is expected to undergo another year of contraction as high inflationary pressure takes a toll on steel demand there. Demand in the US is expected to show a moderate increase by 1% YoY in 2023, owing to the focus on the infrastructure of the current US administration.

Table 1. Steel Demand Forecasts Finished Steel Production



YoY growth rates, %

2022 2023 (P) 2024 (P) 2022 2023 (P) 2024 (P)
European Union and United Kingdom 151.8 151.3 159.8 (7.9) (0.4) 5.6
Other Europe 39.2 42.1 44.6 (2.6) 7.4 6.0
Russia and other CIS + Ukraine 53.3 51.5 49.3 (8.7) (3.5) (4.3)
USMCA 132.9 135.0 138.1 (3.1) 1.6 2.3
Central and South America 45.4 46.0 47.0 (10.5) 1.4 2.3
Africa 40.6 40.5 42.1 3.6 (0.2) 4.0
Middle East 51.3 52.4 54.1 3.8 2.2 3.2
Asia and Oceania 1,267.0 1,303.6 1,319.1 (2.6) 2.9 1.2


1,781.5 1,822.3 1,854.0 (3.2) 2.3 1.7
World excl. China 860.6 883.0 914.7 (3.0) 2.6 3.6
Developed Econornies 375.5 380.3 392.6 (6.2) 1.3 3.2
China 920.9 939.3 939.3 (3.5) 2.0 0.0
Emerging and Dev. Economies excl. China 485.0 502.8 522.2 (0.3) 3.6 3.9
ASEAN (5) 72.6 77.1 81.4 (0.3) 6.2 5.7
MENA 69.8 70.2 72.5 4.9 0.6 3.4

Table 2. Top 10 Steel Using Countries 2022

SRO April 2023, Finished Steel Products



YoY growth rates, %

2022 2023 (P) 2024 (P) 2022 2023 (P) 2024 (P)
China 920.9 939.3 939.3 (3.5) 2.0 0.0
India 114.9 123.3 130.9 8.2 7.3 6.2
United States 94.5 95.8 98.2 (2.6) 1.3 2.5
Japan 55.0 57.2 57.9 (4.2) 4.0 1.2
South Korea 51.2 52.7 53.8 (8.6) 2.9 2.0
Russia 41.7 39.6 36.9 (5.0) (5.0) (7.0)
T?rkiye 32.5 35.4 37.6 (2.6) 9.0 6.0
Germany 31.6 30.9 34.0 (11.0) (2.2) 10.0
Italy 25.1 24.9 25.8 (5.6) (0.9) 3.5
Mexico 24.8 25.4 26.1 (2.8) 2.5 2.6

2.2 Indian Steel Industry

The Indian steel demand grew at 13.3% YoY in 2022 to reach 119.86 MT compared to 105.75 MT in the previous year. This growth was primarily driven by government spending on infrastructure and strong domestic consumption. On the supply side, domestic crude steel production increased by 5% YoY to reach 126.25 MT compared to 120.29 MT in the previous year. Domestic finished steel production stood at 122.28 MT, which was a 7.6% YoY increase compared to the previous year.

the Indian government contributed to the decline in Indias steel exports. Secondly, the strong domestic demand prompted the need for additional steel imports to meet the growing requirements within the country. Together, these factors explain the contrasting trends in Indias steel trade, with weak global demand and stronger domestic consumption influencing the figures.

Governments Push to Make India the Steel ‘Hub of the World.

The government has set a target to raise crude steel production capacity from 154 MTPA to 300 MTPA by 2030, making India an export hub for steel production in addition to making the country self-sufficient in almost all grades of steel.

Steel Production Trends


Crude Steel Production (MT) Finished Steel Production (MT)
2019-20 109.14 102.62
2020-21 103.54 96.20
2021-22 120.29 113.60
2022-23 126.26 122.28

2.2.1 International Trade Scenario

According to the Ministry of Steel, during FY 2022-23, India exported 6.7 MT of finished steel, which was 50.2% lower as compared to the previous year. On the other hand, there was a notable increase in the import of finished steel, reaching 6.02 MT during the same period, marking a growth of 29% compared to the previous year. These figures can be attributed to two main factors. Firstly, the sluggish steel demand in Advanced Economies and export duty on steel by

2.2.2 Outlook

As per WSA Indias domestic steel demand is estimated to grow at 7.3% YoY in FY 2023-24. This growth is anticipated to be driven by a robust GDP expansion, government Capex, and strong domestic consumption. In terms of government Capex, in Union Budget 2023-24, the government announced:

Increase of 35.4% to reach effective Capex of 10.68 lakh crore

Highest-ever outlay for railways at 2.4 lakh crore

An outlay of 79,000 crore set aside for PM Awas Yojna Urban

Governments Push for Decarbonisation

Indias steel sector is currently responsible for 12% emissions. Given this significant

of the countrys CO2

environmental impact, it is anticipated that the government will undertake various initiatives such as the Steel Scrapping policy to promote and facilitate sustainable steel production, to achieve its net zero target by 2070.

This attempt by the government to bridge the infrastructure gap is a positive development for the steel industry and aligns with the vision set out by the government in National Steel Policy (NSP) 2017. Additionally, Indias capital goods sector is poised to reap the benefits of the ongoing momentum in infrastructure development and investments in renewable energy. The automotive and consumer durables sectors are also anticipated to sustain healthy growth, driven by a continued rise in private consumption.

PLI Scheme for Speciality Steel

The PLI Scheme is poised to bolster the domestic production of specialty steel, marking a significant milestone in Indias industrial landscape. With approvals granted to 7 applications from 30 companies, amounting to an impressive outlay of _6,322 crore, the government has also committed to investing _42,500 crore to expand downstream capacity by 26 MT and create employment opportunities for 70,000 individuals. This initiative holds great significance as it aligns with the Governments vision of an ‘AtmaNirbhar Bharat (self-reliant India).

Sectors Driving Demand Growth

Infrastructure and Construction

Factors such as Indias growth, urban real estate cycle, renewable energy projects and the governments focus on infrastructure provide a significant untapped opportunity for steel players to play an important role in Indias rise over the next two decades. India has embarked upon several ambitious infrastructure projects that will not only lead to higher steel consumption in the near to medium term but will also lead to a substantial increase in productivity and connectivity in India creating more markets for steel consumption domestically. Some of the landmark projects that are envisaged to push India into the US$5 trillion economy club are - Sagarmala Project, Bharatmala Pariyojna, Narmada Valley Development Project, Delhi-Mumbai

Industrial Corridor, Mumbai Trans-harbour link, Inland Development Waterways Project among many others.

Oil and Gas

Indias rapid economic growth is set to drive increased demand for oil in production and transportation, surpassing that of other major economies. Indias oil demand is likely to increase by 2x by 2045. Moreover, the Government of India has laid out ambitious plans to double its oil refining capacity to a range of 450-500 million tonnes by 2030. These developments present a significant opportunity for steel players to cater to the growing needs of the oil industry.


India has about 225 registered vehicles for every 1000 persons. This compares to 814 for the US for a similar population, despite India having the second largest road network in the world. A rise in per capita income, along with a low base and notable improvements in supply chain conditions, indicate that the Indian automotive sector is on the cusp of a significant take-o_. These factors contribute to a favourable environment for the automotive industry to thrive and expand in the coming years. By aligning their strategies with the evolving needs of the automotive sector, steel manufacturers can capitalise on this opportunity and establish themselves as key contributors to Indias automotive manufacturing landscape. The automotive industry currently contributes to 7.1% of the GDP of India. The government has a vision to make India the automotive hub for the world which will ensure a significant increase in demand for steel from this sector.


JSP is one of Indias integrated primary steel producers with a significant presence in mining. We have manufacturing units located in Raigarh (Chhattisgarh), Angul (Odisha), Barbil (Odisha), and Patratu (Jharkhand). With over three decades of excellence, we are focused on building world-class capabilities to make India self-reliant and a global economic powerhouse.

Our integrated operations in India comprise capacities of 10.42 MTPA of iron-making, 9.0 MTPA of pellets, 9.6 MTPA of liquid steel, and 6.65 MTPA of finished steela. Our product portfolio includes TMT bars, plates, coils, parallel _ange beams and columns, rails, angles, channels, wire rods, fabricated sections, and other steel products.

Approximately, 70% of our domestic iron manufacturing capacity (7.30 MTPA) is achieved through the blast furnace route, while the remaining (~3.12 MTPA) is attained through direct-reduced iron (DRI). Furthermore, we have a captive thermal power generation capacity of around 1,634 megawatts (MW) at its Raigarh and Angul plants. Apart from our steel-manufacturing capacities, our international operations comprise interests in coking coal mining assets in Australia, thermal/coking coal mining assets in Mozambique, and anthracite coal mining assets in South Africa.

3.1 Key Strengths


Raw Material Security

Iron ore

We have access to captive iron ore and coal mines in both India and abroad. We operate two iron ore mines – Tensa (Chhattisgarh) and Kasia (Odisha). While Tensa has a production capacity of 3.11 MTPA. Kasia Mines was recently acquired through the bidding process. The Kasia Mines have an EC of 7.5 MTPA. The Kasia Mines have reserves of 278 million tonnes and are just 18 kms from the Barbil pellet plant. The mine was won in FY 2021-22 with a premium of 118.1%. The actual cost of iron ore will be dependent on the IBM index for the representative grades of iron ore for Odisha which will likely vary depending on various factors. Thus we will continue to have a market-driven cost of iron ore as far as Kasia mines are concerned. However, The Kasia mines are very strategic to the Company owing to their huge deposit of high-grade iron ore and proximity to the Barbil pellet plant. In addition, we are in the process of setting up a slurry pipeline which will lead to substantially lower transportation costs of iron ore from this mine.

Thermal Coal - India

We have won 3 thermal coal blocks in the recent auctions conducted by the Government of India. These thermal coal blocks will not only ensure feedstock to the power plants but also to the DRI plants and the CGP at Angul. Gare Palma IV/6 is in the vicinity of the Raigarh Steel plant. The Gare Palma block has total geological reserves of 166.98 MT and is a fully explored block. We won the block by bidding revenue sharing of 85.25%. This block is in close proximity to the Raigarh steel plant of the Company. We have also won Utkal B1-B2 and Utkal C thermal coal mines. The Utkal B1-B2 mines carry geological reserves of 347.08 MT. We won the mine by being the highest bidder for a revenue share of 15.25%. We also won Utkal C thermal coal block by bidding a 45% premium. This mine has geological reserves of 196.347 MT. The total mining capacity of these mines at the peak is expected at 15.37 MT as per the current EC. These mines will provide 100% thermal coal security to JSP at the current steel-making operations capacity. It is pertinent to note that while we have secured outsourcing for coal on a long-term basis by winning these mines under the auction, the cost of coal will be dependent on the movement of the representative coal Index. Hence, to that extent, the coal costs will continue to vary.

Coal Assets overseas

We also operate thermal and coking coal mines in Australia, Mozambique, and South Africa. We operate the Wollongong coking coal mines in Australia which has an annual capacity of 1.2 MTPA, while its mines in South Africa have anthracite coal with a mining capacity of 1.2 MTPA. Mozambique coal mine has a mining capacity of 5 MTPA.

These mining assets of the Company, once fully operational, will bring in sustainable cost advantage and will make us one of the lowest-cost producers globally. The Company has plans to not only do sustainable and responsible mining, but also sustainable logistics also in a manner that will minimise the carbon footprint on logistics as well.

Integrated Value Chain

Our steel manufacturing operations are vertically integrated, with captive iron ore mines, coal washing, coke oven batteries, pelletisation, sponge iron manufacturing, and power generation, to support steel making through both BF and EAF routes with finishing mills including Rails, TMT, Plates, and Wire Rod among others. The plants are strategically located, in proximity to various iron ore and thermal coal mines leading to significant savings in logistics costs. Through our overseas subsidiaries, we have sizeable coking/thermal/anthracite coal mining assets across Mozambique, Australia, and South Africa. Entire integrated operations ensure minimal wastage and provide us with the flexibility to manufacture products based on demand and accordingly maximise our profitability.

Cost Saving Initiatives

As part of our expansion, we are constructing a slurry pipeline spanning almost 200 km, connecting the Barbil plant to the Angul plant. This is expected to result in a cost reduction as well as a decrease in transportation time. Furthermore, upcoming dedicated berth at the western dock at Paradip Port will reduce the lead time for loading and unloading.

High-Margin Value-Added Products

We are growth focused with an emphasis on producing innovative, value-added products to support Indias infrastructure creation. We have a well-balanced product mix, with value-added products contributing 64% to our sales. Our rail and universal beam mills, plate mills, medium and light section mills, bar mills, and wire rod mills allow us to manufacture value-added products and provide a competitive cost of production. This has resulted in higher realisations and higher operating profits. Additionally, our presence across the entire steel value chain enables us to sell our products at various stages of production. We primarily focus on long products and specialty-grade fiats, which have lower import threats. Furthermore, we are a preferred supplier of rails (including specialty rails) to Indian Railways, Dedicated Freight Corridor Corporation of India Limited (DFCCIL), and metro projects, and we have the capability to manufacture one of the longest rails in India. We are the largest domestic supplier of quenched and tempered plates for applications that withstand severe impact and abrasion.

Focus on Reducing Leverage

We have been consistently de-leveraging our balance sheet. Our repayment of the entire term debt in the overseas subsidiaries enabled us to maintain comfortable debt coverage metrics in FY 2022-2023. From ~16,000 debt in FY 2020-21, we brought it down to

~8,800 crore in FY 2021-22. We have further brought down the net debt to 6,953 crore as of 31st March 2023. Our Net debt to EBITDA is at 0.70x which is the lowest among all the large integrated steel players in India.

Green Initiatives

We have Hydrogen ready DRI units present at Angul using syngas. We have signed an agreement with clean energy provider Greenko for the supply of 1,000 MW of green power for our steel-making operations at Angul, Odisha, as part of our goal to become a net zero steel company. The proposed carbon-free energy will meet the existing

and incremental power demand at the Angul facility, reducing CO2

emissions by approximately 7 million tonnes annually. Greenko will design and develop the associated renewable energy capacity.

Capacity Expansion

Our expansion plan consists of not only expanding crude steelmaking capacity but also encompasses projects that will help structurally reduce our costs as well boost our realisation through the cycle. These projects will help improve our profitability across the cycle. We plan to double our steelmaking capacity at Angul by FY 2024-25. In addition, we are also in the final stages of commissioning our 6mt pellet plant as well as our 5.5 MT Hot Strip Mill. In addition, we also plan to add downstream value add fiat product capacity given the robust demand for downstream fiat products. We are also in the advanced stages of completion of our 200 km long slurry pipeline that will not only aid in reducing costs but also lead to lower emissions, fuel consumption on logistics, eventually supporting the environment, and our commitment to lowering our carbon intensity in steel making. We plan to reinvest the majority of our free cash flow in expansion projects over the next several years to augment our steel capacity, improve raw material security, enrich our product portfolio, and lower our costs on a structural basis, leading to the creation of superior shareholders value.

Power Plant Acquisition

We have acquired a 1,050 MW under-construction thermal power plant under IBC for _410 crore. We will infuse an additional Capex of ~_1,500-1,600 crore. It will provide power to our steel plant in Angul, which is in expansion mode. We intend to use 20-25% lesser coal in these power plants, which will help lower our carbon footprint. Coal for the plant will be sourced from our Utkal C, B1, and B2 mines.

Productivity Enhancement

JSP Angul tapped the highest ever 54 nos. of heats (13,201 MT) from a single BOF in a day on 20th Oct 2022, a world record. We broke our record of 52 heats in a single day.

ESG Initiatives

The steel industry has a major environmental impact due to its high usage of power and water, waste generation, and carbon emissions. Additionally, the sector has negative social impacts, such as health hazards for employees and the surrounding community. As a result, we have been consistently working to reduce our environmental and social risks. Our ESG initiatives are summarised as follows:

The Company has set up a coal gasi_cation technology at the Angul facility to reduce carbon emissions and aims to reduce carbon emissions below 2.0 tonne per tcs by 2030.

Top-down and bottom-up communication of the vision, values, and purpose of the organisation to the employees

Developed an employee development framework to build key competencies at different career group levels

3.2 Business Performance (Domestic)

3.2.1 Steel

Standalone Performance Highlights

Robust sales along with record revenue prove we had a good run in FY 2022-23. Our production for FY 2022-23 stood at 7.89 MT and sales were at 7.68 MT, which was supported by steel demand. During the first nine months of the year, steel demand increased by 12% mostly from infrastructure and construction*, which was in favour of us as our portfolio is primarily focused on this sector.

Despite export duty tax in the first half of the fiscal year, we had a good year on the back of a strong order book and diversified product profile. The share of exports was 13% in FY 2022-23 against 33% in FY 2021-22. During FY 2022-23, we achieved a standalone gross revenue of 58,970 crore and a Net Revenue of 51,180 crore. The EBITDA per metric ton for the year was 11,148 per metric ton. We are focused on decreasing our net debt, thereby decreasing interest expense. Together with a good operating profit, we achieved a net profit ever of 2,427 in FY 2022-23.

Consolidated Performance Highlights

During FY 2022-23, we achieved a consolidated gross revenue (incl. GST) of 60,505 crore and a Net Revenue of 52,711 crore. We achieved an adjusted EBITDA of 9,700 crore and PAT of 3,193 crore. Having achieved the target of 15,000 net debt last year, we continued with our de-leveraging endeavours and stood at 6,953 crore as on 31st March 2023. Net Debt to EBITDA (Trailing) in FY 2022-23 was 0.7 x (as against 0.57x in FY 2021-22).

3.2.2 Power

Our current Captive Power Plants (CPP) collectively possess a capacity of 1634 MW. In addition, we have recently acquired a power plant with a capacity of 1050 MW. With this new addition, our overall capacity is poised to strengthen, ensuring a reliable and sustainable power supply for our operations.

We operate 6x135 MW coal-fired CPP at Angul in addition to a few smaller power plants. At Raigarh, the Company operates 4x135 MW coal-fired CPP. We also operate around 299 MW power capacity driven by input feed from the DRI plants in the form of DRI gas, char, coal middlings. We recently acquired a 2x525 MW under-construction power plant adjacent to our Angul Steel plant. The Company plans to commission these units in FY 2024-25 which will reduce our coal consumption as the heat rate of these under-construction power plants is substantially lower than the existing CPP at Angul.

3.3 Business Performance (Global)

3.3.1 Mozambique

We have 5 MTPA open-cast coking coal mines in Mozambiques coal-rich Moatize region. The Chirodzi project, an open cast-coking mine, produces Semi Soft Coking Coal (80% HCC 64 Mid Vol) and HGT Coal. Coking Coal sales for FY 2022-23 were 759 KT, up from 700 KT in FY 2021-22. FY 2022-23 EBITDA was US$123 million and PAT was US$37 million.

3.3.2 South Africa

JSPs Kiepersol Colliery produces high-quality Anthracite Coal with a maximum capacity of 1.2 MTPA. FY 2022-23 EBITDA was US$31 million compared to US$10.4 million in FY 2021-22.

3.3.3 Australia

We have received clearances for the extraction of 3.7 MT of coal over five years from the Russell Vale mine. We are trying to debottleneck and make changes in the mining and processing of coal. We are looking to invest in a washery which will help reduce the ash content and improve the realisation as well as usability in the blast furnace. In FY 2022-23, the production was below its capacity, and the reported operating EBITDA and PAT were US$4.4 million and US$(66) million respectively. We are focussing on improving both the production and quality of coal. During the year, the Australian operations reported an Fx loss of US$18.3 million vs a loss of US$12 million in FY 2021-22.

3.4 Business Outlook

The Company has been undertaking green initiatives to reduce its carbon footprint as well as reduce the cost of production. Our cost of production has been increased by 4% owing to the variety of raw material mix, which included, thermal coal, coking coal, and iron ore. However, once our captive coal mines are operational, the cost of key raw materials and power is likely to reduce substantially on a structural basis, leading to structural improvement in our margins.

In terms of net debt, we have successfully decreased our debt to 6,953 crore as of March 31, 2023. We have a prudent approach to managing our debt ensures financial stability and allows us to maintain a healthy balance between our liabilities and earnings.

We are taking all the right steps by ramping up our production and increasing our capacity both organically and inorganically.


4.1 Standalone Performance


FY 2022-23 FY 2021-22
Net revenue 51,180 49,431
EBITDA* 8,562 14,765
PAT 2,427 8,283

4.2 Consolidated Performance


FY 2022-23 FY 2021-22
Net revenue 52,711 51,086
Adjusted EBITDA** 9,700 15,241
PAT 3,193 8,248

**Note: Adjusted for one-o_ FX loss of 235 crore in FY 2022-23, and

272 crore in FY 2021-22

4.3 Ratios


FY 2022-23# FY 2021-22 Variance Reason for Variance

Debtors turnover ratio (days)

8.27 11.69 (29%) Due to increase in turnover during the year ended March 31, 2023.
Inventory turnover (days) 80.53 105.80 (24%)

Interest coverage ratio

8.13 11.15 (27%) Due to decrease in Profitability during the year ended March 31, 2023.
Current ratio 0.94 1.37 (31%) Due to Sale of Investment held in subsidiary in Jindal Power
Debt equity ratio 0.29 0.33 (11%)
Net Debt to EBITDA 0.77 0.67 15%

Operating profit margin (%)

18.45 30.37 (39%) Due to decrease in Profitability during the year ended March 31, 2023.

Net profit margin (%)

4.74 16.73 (72%) Due to decrease in Profitability and increase in Turvover during the year ended March 31, 2023.

Return on net worth (%)

5.99 20.54 (71%) Due to decrease in Profitability during the year ended March 31, 2023.


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6. CSR

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As a global Company managing operations across multiple geographies, we are exposed to a wide variety of risks. The Company has an efficient risk management policy together with a robust governance framework in place to identify and mitigate risks. Risk management at JSP involves risk identification, evaluation, reporting, and resolution to ensure operations can run without any hindrance. The Risk Management Committee aids the Board in the identification and assessment of changes in risk exposure, regularly reviews risk control measures, and undertakes control measures following assessment and due approval of the Board where required. The risk management process is reliable and adequately guards the Companys operations against foreseeable risks while keeping it duly prepared for any contingencies in the future. Given the fact that risk management is critical to business continuity and the realisation of the long-term strategic objectives of the Company, risk management is embedded in the decision-making process, in all business-critical activities, functions, and processes. As the Board carries the ultimate responsibility for the management of risks and for ensuring the effectiveness of internal control systems, it ensures that the Company complies with all regulations and encourages adherence to applicable laws and statutes as part of its organisational culture. The identification of risks and their evaluation is carried out for each strategic function and operation area by the department heads. Risk management processes and mitigation is subject to regular review by the senior management and the Board of Directors.

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The Companys internal control system considers the scope, type, and magnitude of its operations. The Audit Committee provides extra supervision regarding financial risks and controls, while the Board of Directors and Audit Committee oversee the internal financial controls to confirm their adequacy and efficiency. To address these matters, the Audit Committee holds regular meetings with the statutory auditor and management. The internal control system guarantees optimal usage of the Companys resources and adherence to compliance standards.


The internal audit department ensures that all operations comply with prescribed business standards through regular monitoring.

The audit team supervises internal processes and recommends necessary changes to correct any deviations from established practices. Strict monitoring and effective reviews ensure high compliance with the rules and regulations that govern the Company. The internal audit team has the necessary skills and experience and reports to the Chairman of the Audit Committee and the Managing Director. With the Audit Committees approval, the team prepares an annual Risk-Based Audit Plan (RBAP) to assess the effectiveness of internal controls. The audit is conducted based on this approved plan, and any identified gaps in the internal control system are communicated to process owners and management for necessary action. Matters of significance are reported to the Audit Committee.


This report contains projections, estimates, etc., which are ‘forward-looking statements. Actual results could differ from those expressed or implied in this report. Important factors that may have an impact on the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets, changes in government regulations/policies, tax laws and other statuses, and other identical factors. The Company assumes no responsibility to publicly modify or revise any forward-looking statements on the basis of any future events or new information. Actual results may differ from those mentioned in the report.