Jindal Steel & Power Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

1. Economic Overview

1.1 Global Economic Overview

Global GDP growth in 2023 continued to surpass initial estimates significantly demonstrating resilience and optimism among both advanced as well as developing economies. 2023 growth rate was initially pegged at 2.8% by IMF which was later revised upwards to 3.0% and subsequently to 3.2%. This optimism has also resulted in improvement in 2024 growth expectations from 3.0% previously to 3.2%. Global economies have responded to the multiple events in the past few years impacting global growth, including but not limited to, skewed post-pandemic recovery, the Russia-Ukraine conflict, multiple supply chain crisis, and rising inflation.

I nterest rates have peaked out in almost all major economies and have started retreating in a few cases driven by steadfastly cooling inflation. While supply chain issues have largely been resolved over the last two years post the Russia-Ukraine conflict, however, growth has still not returned to the pre-pandemic levels as interest rates remain over the pre-pandemic levels and post pandemic shocks are still reverberating in many sectors.

Robust employment growth, driven by supportive government spending and resilient household consumption, played a pivotal role in the post-pandemic economic recovery. Central banks around the world responded to rising inflation with synchronised monetary tightening, which helped moderate inflation rates.

I nflation in the US has reduced from peak of 9.1% in Jun22 to 3.3% in May24. Similarly, inflation in Euro zone peaked at 10.6% in Oct22 which has now fallen to 2.6% currently. In India, inflation was at peak at 7.8% in Apr22 which has also reduced to 4.75% in May24 in line with global trends. However, interest rates are yet to reduce to match the corresponding reduction in inflation, which once done, will further boost overall economic sentiments. Interest rates in the US were at near zero during pre-pandemic which rose to 5.375% and have remained constant since Aug23. Interest rates are likely to reduce in the coming quarters if inflation cools further in the US. However, in the EU, interest rates moved from zero percent to 4.5% and has been static since Sep23 awaiting more clarity on cooling inflationary pressures. As inflation in India was significantly less severe that the developed economies, interest rate hike was less severe than the developed economies and moved only from 4% to 6.5%.

While globally inflation has come off significantly, but it is still higher than the expected lines, interest rates have peaked out and any movement on the downside on the interest rates will positively impact all economic development indicators.

1.2 Global Economic Outlook

As per the World Economic Outlook Jul24 edition published by the IMF, global GDP growth is likely to be at 3.2% in 2024 and 3.3% in 2025. The outlook for 2024 has improved significantly from 2.9% in its Oct23 report to 3.2% on the back of significant improvement in outlook for both Advanced as well as Emerging Economies. The global economic recovery is led by US where the GDP growth outlook has improved considerably from 1.5% to 2.6% while Indias GDP growth prospects, which were anyways highest amongst the large economies, at 6.8% previously has also improved to 7%.

India remains the fastest-growing economies among the large economies globally.

The stability in economic growth is supported by a confluence of several factors namely - steeply falling inflation, improvement in labour participation leading to more demand creation, absorption of supply shocks due to the Russia-Ukraine conflict with new supply chain routes/sources being established among others.

However, the growth outlook remains lowest among the last several years barring the post-pandemic rebound as interest rate reductions are yet to be reflected at the consumer level and Chinas participation in the global economic growth continues to be declining. With the impact of past stimulus packages fading, Chinas economy is expected to continue to slow down further in absence of any meaningful stimulus. However, investments in decarbonisation and infrastructure related to the same along with expectation of targeted stimulus in various sectors like housing where growth is faltering will likely help China maintain its target growth rate of around 5% in 2024.

1.3 Advanced Economies (AE)

In advanced economies, growth was 1.7% in 2023 and is projected to remain steady in 2024 and rise to 1.8% in 2025. The 2024 upgrade primarily reflects a revision in the US growth, which more than offsets downward revisions for the Euro area in 2024 and 2025.

In the United States, growth is projected to increase to 2.6% in 2024, and further by 1.9% in 2025. The 2024 upward revision is largely due stronger-than-expected growth in the fourth quarter of 2023.

Growth in the Euro area which was significantly affected by the regions high exposure to the Russia-Ukraine conflict, is projected to recover from its estimated low rate of 0.5% in 2023 to 0.9% in 2024 and 1.5% in 2025. This recovery is driven by stronger household consumption as effects of the energy price shock subside and lower inflation supports growth in real income. However, the pace of recovery is likely to be slower for Italy and France for both 2024 and 2025 amid persistently weak consumer sentiment.

Among other advanced economies, growth in the United Kingdom is projected to rise from an estimated 0.1% in 2023 to 0.7% in 2024, as the aftershocks of high energy prices wane. Growth is expected to further increase to 1.5% in 2025, as disinflation allows financial conditions to ease and real incomes to recover. In Japan, output is projected to slow from an estimated 1.9% in 2023 to 0.7% in 2024 and 1.0% in 2025. This slowdown is attributed to the fading of one-off factors that supported growth in 2023, including a surge in inbound tourism.

Overall, the Advanced economies are expected to witness rebound in growth in 2024 driven by (a) dis-inflation from lower oil prices, (b) improved labour participation, (c) lowering interest rates.

AF Growth Forecast

Region	2023	2024 (P)	2025 (P)
Advanced Economies	1.7	1.7	1.8
United States	2.5	2.6	1.9
Euro Area	0.5	0.9	1.5
Germany	-0.2	0.2	1.3
France	1.1	0.9	1.3
Italy	0.9	0.7	0.9
Spain	2.5	2.4	2.1
Japan	1.9	0.7	1.0
UK	0.1	0.7	1.5
Canada	1.2	1.3	2.4
Other Advanced Economies	1.8	2.0	2.2

1.4 Emerging Market and Developing Economies (EDME)

In emerging markets and developing economies, growth is expected to remain stable at 4.3% in both 2024 and 2025. This stability is due to a moderation in growth in emerging and developing Asia being offset mainly by rising growth in the Middle East, Central Asia, and sub-Saharan Africa. Low-income developing countries are anticipated to experience a gradual increase in growth, from 4.0% in 2023 to 4.4% in 2024 and 5.3% in 2025, as certain constraints on near-term growth ease.

Growth in emerging and developing Asia is expected to decrease from an estimated 5.7% in 2023 to 5.4% in 2024 and 5.1% in 2025. Specifically, growth in China is projected to moderate from 5.2% in 2023 to 5% in 2024 and further 4.5% in 2025, as the positive effects of one-off factors like the boost to consumption, fiscal stimulus ease, while weakness in the property sector persists. Inability of providing a large scale fiscal stimulus without a corresponding spike in debt is one of the key reasons for declining growth rate in China. In contrast, Indias growth is projected to remain strong at 7.0% in 2024 and 6.5% in 2025, driven by continuing strength in domestic demand and a higher share of working-age population. India also benefits from a stable policy regime which augurs well for its long-term growth objectives.

FMDF Growth Forecast

Region	2023 (F)	2024 (P)	2025 (P)
Emerging Market and Developing Economies	4.4	4.3	4.3
Emerging and Developing Asia	5.7	5.4	5.1
China	5.2	5.0	4.5
India	8.2	7.0	6.5
Emerging and Developing Europe	3.2	3.2	2.6
Russia	3.6	3.2	1.5
Latin America and the Caribbean	2.3	1.9	2.7
Middle East and Central Asia	2.0	2.4	4.0
Sub-Saharan Africa	3.4	3.7	4.1

Source: IMF WEO July 2024, Note: P = Projected

1.5 Prices

1.5.1 Input prices Crude Oil

Post spike in oil prices to close to USD140/bbl, oil prices have been steadily declining as supply chain issues have resolved, fears of supply shocks have receded. Recent tensions in the Middle East also led to a temporary spike in oil prices before demand slowdown weighed in. With continuous build up in oil inventory and strong and sustained focus on renewables, oil prices are at best expected to remain range bound with a downward bias, adjusting for any temporary flare ups. While economic activities are likely to improve going forward, a corresponding rise in oil prices look difficult due to resurgence in renewable power generation. Oil supplies on the other hand are expected to continue to rise all the way up to 2025, which should keep lid on oil prices with a downwards bias.

Thermal Coal

As per the World Bank, average thermal coal prices for benchmark South African and Australian coals retreated by 50% each in 2023. The sharp reduction was mainly on account of normalisation of prices post spike after the breakout of the Russia-Ukraine conflict with a potential supply shock for oil and natural gas and its domino effect on the thermal coal prices.

Australian coal prices were 47% lower than a year earlier, while South African coal prices decreased by 30%. Despite such sharp price drops, global coal consumption reached an all-time high in 2023, increasing by 120 million tonnes (14%) from 2022 to a record 8.54 billion tonnes. However increased renewable power capacities globally and higher base effect have resulted in falling coal prices through 2023. Both the US and EU witnessed reduction in demand for thermal coal to the extent of close to 100 MT each which was more than offset by around 100 MT increased coal demand from India and about 220 MT higher consumption in China. Production rose by 150 MT in 2023, while demand rose by 120 MT.

India has committed to net zero by 2070 considering the significant economic development needed to achieve the various economic targets set by the government both in the medium term as well as in the long term, marking the importance of coal as the cornerstone of fuel for the nation. Even though China has also pledged to net zero by 2060, its dependence on coal as the chief source of fuel cannot by undermined as demonstrated by rising consumption of over 200 MT in 2023. Any potential draught in China or elsewhere could significantly impact renewable power generation and bring forth the dependence of thermal power capacities.

Global coal production is estimated to have risen by about 150 million tonnes in 2023. Indias output increased by about 100 million tonnes, while Chinas production rose by only about 50 million tonnes, partly due to enhanced safety measures in domestic mines. Production declined by about 50 million tonnes in the United States and 70 million tonnes in the European Union, and it stagnated in Australia due to labour shortages and soft exports to China. Global coal trade reached an all-time high in 2023, increasing by 100 million tonnes, largely driven by a rise in Chinese imports by 150 million tonnes as domestic production lagged consumption. The Asia Pacific region received about 80% of global coal exports, reflecting the consumption patterns and the regions dominance in global coal demand led by India and China.

Iron Ore

The recent price weakness is primarily due to increased seaborne supply from Australia and Brazil, leading to higher port stocks in China. Steel demand is expected to remain subdued in 2024, largely because of ongoing weakness in Chinas residential construction sector, which saw a 20% Y-o-Y decline in new home starts in 2023. In the event of no major stimulus from China, the property prices are expected to continue its downward trend with similar trend in steel prices, which in turn should result in lower steel production. Reduction in steel production in China, will lead to reduced iron ore prices. Rising Chinese share in global iron ore projects are also steps taken by China to reduce iron ore prices on a structural basis. While steel output is anticipated to increase in both 2024 and 2025, the projected increase in iron ore production from Australia, Brazil, and new projects elsewhere especially in developing economies is likely to exert further downward pressure on prices.

Coking Coal

Coking coal prices are expected to remain range bound as lower demand from China which draws coking coal mainly from domestic resources and from Mongolia, is likely to be offset by rising demand from India. Further, weaker steel prices are likely to keep coking coal prices range bound. During the year, volatility in coking coal prices was significantly lower compared to the previous year which was impacted due to supply shocks owing to Russia-Ukraine conflict. Coking coal prices averaged at USD507/t during Q4Y22 compared

to USD 357/t during Q4 FY23 and USD 327/t during Q4 FY24 reflecting lower volatility as well as consistent supplies for a major part of the year. China imported 100 MT coking coal in 2023 which was about 60% higher compared to 2022. However, continued decline in steel prices lead to weak coal prices which was also aided by higher base effect from the supply shocks in Feb-Mar22 due to Russia-Ukraine conflict.

Coking Coal Price Trends (US $/t)

1.5.2 Output Prices Global Steel Prices

Over the past year, global steel prices experienced varied trends across different markets, influenced by a combination of local and global factors. In general, prices showed a declining trend, particularly noticeable in the major steel markets of India, China, the USA, and the European Union. This decline was driven by local supply-demand imbalances, seasonal factors, and policy impacts. On a year-on-year basis, however, prices of a few products saw an uptick in India while they declined elsewhere compared to the same month of the previous year.

t month-on-month prices declined in all major steel markets. r Year-on-year, HRC prices were down in all markets compared to June 2023.

I. 6 Indian Economic Review

During FY 2023-24, the Indian economy exhibited robust growth, expanding by 8.2%. This growth was bolstered by positive indicators across various sectors, reflecting resilience and optimism backed by strong quantitative data. Consumer confidence surged, as indicated by Reserve Bank of Indias (RBI) household survey, showing increasing positivity among households. Enterprises also reported favourable business conditions, with higher production levels, enhanced capacity utilisation, and an improved employment outlook.

Economic activity remained vibrant throughout the fiscal year. High-frequency indicators such as e-way bills, toll collections, and automobile sales consistently reflected strong domestic demand. The labour market saw significant improvements, with the unemployment rate dropping to 7.6% by March 2024. The organised sector experienced heightened job creation, as evidenced by the PMIs for manufacturing and services, bolstering employment opportunities. A notable

II. 1% increase in the capital expenditure outlay for FY 2024-25 was announced, bringing the total to 2 11,11,111 crore, constituting 3.4% of GDP.

Agricultural activities significantly contributed to rural employment, particularly with the onset of the Rabi harvest, leading to reduced demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Fiscal management remained prudent, with the Union governments gross fiscal deficit staying within estimates. Direct tax collections saw a notable Y-o-Y increase of 21.6%, underscoring sound fiscal management. Overall, India remained the shining star in otherwise dampened global economic scenario in FY2023-24.

INFLATION DYNAMICS

Indias inflation rate in FY 2023-24, as reported by the National Statistical Office (NSO), shows a drop to 4.85% in March 2024, the lowest in four months. This marks a slight decrease from 5.09% in February 2024. By April 2024, retail inflation further eased to 4.83%, staying within RBIs tolerance band of 2 to 6%. Additionally, the wholesale price index (WPI) for April 2024 was 1.26% (provisional), reflecting increased prices in food, electricity, crude petroleum, natural gas, and other goods manufacturing. It is expected that if the inflation trend persists its downward movement, interest rate reduction might be affected, which will further boost domestic consumption.

1.7 High Frequency indicators

High-frequency indicators such as GST collections, freight revenue, and the Manufacturing PMI all point towards robust economic growth. Goods and Services Tax (GST) collections (Centre plus States) in April 2024 recorded a Y-o-Y growth of 12.4%, surpassing the 22 lakh crore mark for the first time. April typically sees the highest GST collections for any financial year due to increased year- end economic activity. Freight transport indicators showed mixed results. Railway freight revenue grew by 6.3% Y-o-Y in February 2024, supported by an increase in the movement of cement. Cargo traffic at major ports rose by 1.3% in April 2024, led by coking coal and other miscellaneous cargo. Despite a sequential moderation, the headline PMI for manufacturing remained in expansionary territory in April 2024, buoyed by new orders and output. The PMI for services also continued to expand, albeit at a slower pace.

Outlook

The RBI has maintained its GDP growth forecast at 7% for FY 2024-25. Looking ahead, India appears to be all set to become worlds third- largest economy by 2030 if the economic activities continue at the current pace. This future growth is driven by robust domestic consumption, visible structural demand, and healthier corporate and banking sectors driven by the largest pool of young working population globally. Indias economic growth is being fuelled by several factors which includes increased domestic consumption, a shift to renewable energy, improved trade policies, substantial infrastructure investments, and ongoing digitalisation efforts. With broad-based strategic reforms, India is well-positioned for sustained economic growth for the next decade.

India Growth Trend (%)

2. industry Overview

2.1 Global Steel industry

World steel production in 2023 stood at 1,892 MT compared to 1,890 MT in 2022. This is still below the post pandemic stimulus induced growth of 1,963 MT in 2021. Global steel industry growth was impacted due to slowdown in China which accounts for around 54% of the global steel production. Chinese steel production remained flat at 1,019 MT in both 2022 as well as in 2023. India remained the bright spot in the global steel industry adding nearly 14. 8 MT production reflecting 11.8% growth.

Global steel demand in 2023 stood at 1,763 MT which was 1.1% lower compared to 2022. The reduction in global steel demand was driven by (a) China with an estimated decline of 3.3% to 895.7 MT in the similar period and (b) EU and the UK with an estimated decline of 10% to 136.8 MT. This de-growth was largely offset by (a) India, where consumption jumped by 14.8% to 133.4 MT and (b) other Europe where consumption was up 13.5% at 44.3 MT.

Top 10 Crude Steel Production Countries

Country	2023 (MT)	2022 (MT)	% change
China	1,019.1	1,019.1	0.0
India	140.2	125.4	11.8
, Japan	87.0	89.2	-2.5
United States	80.7	80.5	0.2
Russia	75.8	71.7	5.6
South Korea	66.7	65.8	1.3
se Germany	35.4	36.9	-3.9
Turkey	33.7	35.1	-4.0
Brazil	31.9	34.1	-6.5
Iran	31.1	30.6	1.8
Source: World Steel Association; Note: MT = million tonnes

Finished Steel Products

Countries		MT			Y-o-Y growth rate, %
	2023	2024(f)	2025(f)	2023	2024(f)	2025(f)
China	895.7	895.7	886.7	-3.3	0.0	-1.0
India	133.4	144.3	156.0	14.8	8.2	8.2
United States	90.5	92.2	94.0	-4.2	1.8	2.0
South Korea	54.7	54.3	54.4	6.7	-0.8	0.2
Japan	53.3	53.3	53.9	-3.0	-0.1	1.1
Russia	44.6	46.4	46.4	7.0	4.0	0.0
Turkey	38.1	41.5	39.4	17.2	9.0	-5.0
Mexico	28.5	28.8	29.3	14.0	1.2	1.6
Germany	28.0	28.9	31.8	-13.7	3.2	10.0
Brazil	23.9	24.1	24.5	1.5	1.0	1.6

2.1.1 Outlook

Looking ahead to FY 2024-25, the global steel industry was expected to face another year of uncertainty with macroeconomic headwinds still impacting the market. While steel demand in the developed world was projected to improve from a low base in 2024, growth forecasts were tempered by the continued effects of monetary tightening on steel-consuming sectors, particularly construction. However, India continues to remain the bright spot in the global steel industry in terms of both production as well as consumption as per capita steel consumption at 93.4 kg remains significantly below world average of 219 kg.

Regions	MT			Y-o-Y growth rates, %
	2023	2024 (f)	2025 (f)	2023	2024 (f)	2025 (f)
European Union (27) & United Kingdom	136.8	140.7	148.1	-10.0	2.9	5.3
Other Europe	44.3	47.9	46.1	13.5	8.1	-3.7
Russia & other CIS + Ukraine	56.1	58.4	58.9	8.6	4.1	0.8
USMCA	131.7	133.6	136.2	-1.0	1.4	1.9
Central and South America	45.7	45.5	46.8	0.9	-0.5	2.8
Africa	35.0	36.9	38.5	-1.7	5.4	4.4
Middle East	54.9	57.2	58.7	-0.4	4.1	2.6
Asia and Oceania	1258.5	1273.1	1281.9	-1.0	1.2	0.7
World	1763.0	1793.1	1815.2	-1.1	1.7	1.2
World excl. China	867.3	897.4	928.4	1.3	3.5	3.5
Developed Economies	359.4	364.2	374.1	-4.2	1.3	2.7
China	895.7	895.7	886.7	-3.3	0.0	-1.0
Em. and Dev. Economies excl. China	507.9	533.2	554.3	5.5	5.0	4.0
ASEAN (5)	73.4	GN=RIGHT>75.9	79.2	1.1	3.5	4.3
MENA	69.3	72.6	74.8	-2.2	4.7	3.0

Steel demand is expected to increase 1.7% in 2024 to 1,793.1 MT which is a growth of almost 30.1 MT. Almost one-third of this growth is expected to be contributed by India where steel consumption is expected to increase by 14.8% to 144.3 MT. Chinese steel consumption is likely to stay flattish at 895.7 MT as per the latest Short Range Outlook (SRO) published by World Steel Association in April24 However, it is important to note that WSA has highlighted that there is likely to be a broad based recovery in steel consumption globally as economic stability returns and interest rates reduce, driving demand for both household as well as infrastructure sectors. Exports from China continue to remain the most crucial parameter while monitoring the global steel price recovery.

2.2 Indian Steel Industry

As per data from Joint Plant Committee (JPC) Indias domestic finished steel consumption surged by 13.6% to 136.3 million tonnes, primarily driven by improved demand from the automotive and infrastructure sectors. In terms of domestic demand, the automotive industrys demand improved significantly in FY 2023-24 at 12.5% Y-o-Y with a notable shift towards electric vehicles (EVs). Additionally, infrastructure and construction sectors demonstrated resilience, supported largely by government-funded development projects. This growth trend is crucial as it aligns with the National Steel Policy, which targets increasing Indias annual steel manufacturing capacity to 300 million tonnes and raising per capita steel consumption to 160 kg by 2030.

Crude Steel production grew 13.2% to 144.0 million tonnes while finished steel production was up 12.7% to 138.8 million tonnes. However, imports of finished steel surged 38.2% to 8.3 million tonnes compared to 6.0 million tonnes. Finished steel exports increased by 11.9% to 7.5 million tonnes from 6.7 million tonnes a year ago.

Items	Performance of Indian Steel Industry
	April-March 2023-24* (MT)	April-March 2022-23* (MT)	% change
Crude Steel Production	144.0	127.2	13.2
Hot Metal Production	87.0	81.2	7.2
Pig Iron Production	7.3	5.9	24.8
Sponge Iron Production	51.5	43.6	18.1
Total Finished Steel (alloy/stainless + non-alloy)
Production	138.8	123.2	12.7
Import	8.3	6.0	38.2
Export	7.5	6.7	11.9
Consumption	136.3	119.9	13.6

Source: JPC, "provisional; Note: MT = million tonnes

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.

2.2.1 Indian Trade Scenario

Imports continue to rise during FY 2023-24 as Chinese exports jumped by 90% to 2.7 MT. Out of USD 10 billion of imports in India, Chinese exported steel worth USD 2.8 billion up 35% Y-o-Y, despite falling steel prices.

HR coil imports continued to be largest single product category of imports at 3 MT almost doubling on Y-o-Y basis. GP sheets and coil imports also increased by 41% during the year to 1.3 MT HR plate imports jumped 3x to 0.66 MT. In terms of exports, India exported mainly to EU with Italy, Belgium and Spain being the top 3 destinations.

2.2.2 Outlook

India continues to drive global steel production as well as consumption growth. Given the significant population demographic advantages coupled with industry-friendly economic policies supporting faster infrastructure creation, steel consumption in India is likely to remain at elevated levels. This is also in line with the governments vision of steel capacity of 300 MT by 2030 resulting in production of 258 MT and per capita consumption of steel at 160 kg compared to 93 kg currently.

This significant rise underscores the countrys accelerating industrialisation and infrastructure development, positioning India as a key player in the global steel market.

3. Company Overview

JSP stands as one of Indias premier integrated steel producers, with a notable presence in mining. Our manufacturing units are strategically located in Raigarh (Chhattisgarh), Angul (Odisha), Barbil (Odisha), and Patratu (Jharkhand). With over three decades of excellence, we are dedicated to developing world-class capabilities to enhance Indias self-reliance and bolster its status as a global economic powerhouse.

Our integrated operations in India encompass significant capacities: 10.42 MTPA of iron making, 15.0 MTPA of pellet (6.0 MTPA commissioned in FY 2023-24), 9.6 MTPA of liquid steel, and 13.25 MTPA of finished steel (6 MTPA Hot Strip Mill commissioned in FY 2023-24). Our diverse product portfolio includes TMT Rebars, plates, coils, parallel flange beams and columns, rails, angles, channels, wire rods, fabricated sections, and other steel products. Approximately 70% of our domestic iron manufacturing capacity, which amounts to about 7.30 MTPA, is produced through the blast furnace route, while the remaining ~3.12 MTPA is achieved via direct-reduced iron (DRI).

In addition to our steel manufacturing capacities, we operate a captive thermal power generation capacity of around 1,634 megawatts (MW) at our Raigarh and Angul plants. Beyond our domestic operations, JSP has a strong international presence, with interests in coking coal mining assets in Australia, thermal and coking coal mining assets in Mozambique, and anthracite coal mining assets in South Africa.

JSP remains committed to expanding its capabilities and resources, significantly contributing to Indias economic growth and self-reliance.

3.1 Key Strengths

Raw Material Security Iron Ore JSP possesses captive iron ore and coal mines both within India and abroad. Within India, the Company operates two iron ore mines: both located in Odisha. Tensa has a production capacity of 3.11 million tonnes per annum (MTPA), while the Kasia mines, obtained through a bidding process, have an Environmental Clearance (EC) for 7.5 MTPA production. The Kasia mines hold reserves of 278 MT and are strategically located just 18 km from the Barbil pellet plant. Securing the Kasia mines in FY 2021-22 came at a premium of 118.10%. These mines are of significant strategic importance to the Company due to their vast deposits of high- grade iron ore and close proximity to the Barbil pellet plant. Moreover, JSP is currently in the process of establishing a slurry pipeline, which is expected to considerably reduce transportation costs associated with iron ore from this mine.

Rail Mill Expansion - A Driving Force for Atmanirbhar Bharat

Jindal Steel & Power (JSP) is significantly contributing to Indias goal of self-reliance in rail steel solutions with its existing 1 MTPA rail mill in Raigarh, Chhattisgarh. This mill produces specialty rails like 1080HH rails, crucial for heavy axle loads, and is supplying them to key metro and RRTS projects across the country. In line with its commitment to support the nations infrastructure development, JSP plans to commission a state-of-the-art

1.2 MTPA Rail & Heavy Structure mill at its Angul Steel complex in Odisha, further boosting its rail-making capacity to 2.2 MTPA. JSPs focus on import substitution products and expansion plans align with the governments Atmanirbhar Bharat initiative, demonstrating its dedication to modernising Indias rail network while also exploring international markets for its rail exports.

Thermal Coal - India

JSP has secured three thermal coal blocks in recent government auctions, ensuring a stable supply of feedstock for its power plants, DRI plants, and CGP at Angul. Among these blocks is Gare Palma IV/6, located near the Raigarh steel plant, having total geological reserves of 166.98 million tonnes (MT). With a successful bid of 85.25% revenue sharing, this fully explored block enhances proximity to the Companys Raigarh steel plant. Additionally, JSP has acquired Utkal B1-B2 mines with geological reserves of 347.08 MT, clinching the bid with a revenue share of 15.25%. Similarly, the Company secured Utkal C thermal coal block by agreeing to a 45% premium, containing geological reserves of 196.347 MT. These acquisitions, with a combined peak mining capacity of 15.37 MT, as per the current EC, ensure 100% thermal coal security for JSPs steelmaking operations.

Coal Assets Overseas

JSP operates thermal and coking coal mines across Australia, Mozambique, and South Africa. In Australia, the company runs the Wollongong coking coal mines with an annual capacity of 1.2 MTPA (operations is put under care and maintenance during the FY), while its South African mines yield anthracite coal with a capacity of

1.2 MTPA. Additionally, the Mozambique coal mine has a capacity of 5 MTPA. These mining assets are poised to provide sustainable cost advantages, positioning JSP as one of the most competitive producers globally. The Company is committed to conducting mining operations responsibly and sustainably, with a focus on minimising carbon footprint in logistics.

Integrated Value Chain

Our steel manufacturing operations are vertically integrated, covering captive iron ore mines, coal washing, coke manufacturing, pelletisation, sponge iron manufacturing, power generation, and the production of semi-finished and finished steel products. Strategically located plants near diverse iron ore and thermal coal mines result in minimised transportation costs. With substantial coking, thermal, and anthracite coal mining assets in Mozambique, Australia, and South Africa through our overseas subsidiaries, our integrated operations minimise wastage and offer flexibility to tailor product manufacturing to meet demand, thereby optimising profitability.

Cost Saving Initiative

As part of our expansion efforts, we are currently building a slurry pipeline stretching nearly 200 km to link the Barbil plant with the Angul plant. This initiative is anticipated to yield cost savings and reduce transportation duration significantly. Additionally, we have finalised a contract to develop a dedicated berth at the Western dock in Paradip Port, further streamlining loading and unloading processes and reducing lead times for our products by providing a dedicated port facility.

High-Margin Value-Added Products

Our growth-oriented approach underscores our commitment to producing innovative, high-margin value-added products that bolster Indias infrastructure development. With a well-rounded product portfolio, value-added products account for 64% of our sales. Leveraging our rail and universal beam mills, plate mills, medium and light section mills, bar mills, and wire rod mills, we efficiently manufacture value-added products while maintaining competitive production costs, resulting in increased revenues and operating profits. Moreover, our integrated presence across the steel value chain enables us to market our products at various production stages. We prioritise long products and specialty- grade flats, mitigating import threats. Notably, we are the preferred supplier of rails, including specialty rails, to Indian Railways, DFCCIL, and metro projects, boasting the capability to manufacture some of the longest rails in India. Additionally, we hold the largest domestic market share for quenched and tempered plates designed to withstand severe impact and abrasion.

Green Initiatives

As a group, our overall strategy is to reduce carbon emissions and become a net zero steel company. By integrating advanced technologies and sustainable practices, we are positioning ourselves at the forefront of the green steel revolution. For e.g. our Direct Reduced Iron (DRI) units at Angul (Odisha) and Raigarh (Chhattisgarh) are equipped to utilise syngas for green hydrogen production.

Furthermore, our sister company Jindal Renewable Power Private Limited (JRPPL) is driving a transformational initiative to develop around 12 GW of renewable energy in India by 2030 to supply RTC (Round the Clock) power to our facilities. This will reduce around 7 million tonnes of CO2 emissions every year and significantly reduce our carbon footprint and achieve our sustainability goals. To achieve these targets JRPPL has already started a 2,800 MW project which includes 1,400 MW of solar and 1,400 MW of wind power. This Hybrid power will ensure a balanced and reliable supply of renewable energy and optimal use of natural resources.

By investing in renewable energy and new storage technologies we are building a cleaner, greener future. Through these combined efforts we are not only addressing the immediate need of decarbonisation but also setting a benchmark for the steel industry. Our approach reflects our commitment to environmental stewardship, operational excellence and corporate responsibility.

Commissioning of State-of-the-Art Hot Strip Mill at Angul Plant

Jindal Steel & Power has achieved a significant milestone with the successful commissioning of its State-of-the-art Hot Strip Mill (HSM) complex at its Angul plant. The commissioning, completed in a remarkable world-record time of 29 months from groundbreaking on August 7, 2021, saw the HSM producing its first coils on January 10, 2024, followed by the dispatch of the coils on January 15, 2024. Supplied by SMS SIEMAG, the HSM is capable of producing up to 6 MTPA of 1.00mm thick and 1680mm wide coils, equipped with advanced features ensuring top-notch flatness, uniform mechanical properties, and production of superior value-added grades. This accomplishment positions Jindal Steel & Power to serve various sectors, including automotive, construction, oil, downstream cold rolling, galvanising, and colour coating.

Capacity Expansion

We are currently in the advanced stages of completing our current round of capex programme which will double our steel making capacity at Angul from 6 MTPA to 12.3 MTPA and raise JSPs total steel making capacity from 9.6 MTPA to 15.9 MTPA. The total capex outlay is731.000 crore which includes 723,200 crore for the steel capacity expansion, 73,000 crore for ACCP2, 71,800 crore for mining projects and73.000 crore for new projects like micro-palletisation plant, Q&T line, rakes, township among others. The company strives to achieve all of this while maintaining a healthy balance sheet by not exceeding net debt to EBITDA beyond 1.5x at any time. Most of the equipment/ operations are likely to be commissioned between Q4 FY25 and Q3 FY26.

Awards and Recognitions

• Gold Awards from Quality Circle Forum of India (Pep!, Rourkela chapter}: Awarded for excellence in quality circles, acknowledging outstanding contributions to process improvement and quality within the organisation, and recognised as the highest in their category among 198 competing teams.

• 2024 Titan Business Awards - Gold Winner: Awarded for Best Employee Engagement Strategy in the Human Resources category, recognising the companys outstanding approach and efforts in engaging and motivating employees effectively.

• OTV Business Odisha Awards 2023: Awarded for Sustainable Value Creator.

• Eastern India Leadership Awards 2023: Awarded for Best CSR Impact Initiative by EIILM-Kolkata.

• FAME National Award 2023: Awarded for Best CSR Practices in Diamond Category.

• IHW CSR Health Impact Gold Award 2023: Awarded for COVID Relief Initiatives in the Mega Projects Category.

• 10th Greentech CSR India Award 2023: Awarded for the Welfare of Divyangs.

3.2 Business Performance (domestic}

3.2.1 Steel

Standalone Performance Highlights

In FY 2023-24, despite Global head winds, our sales volumes were higher by 1.4% Y-o-Y at 7.79 MT. Our production reached 7.92 MT, primarily driven by demand in infrastructure and construction sectors. Exports accounted for 9% of total sales, marking a decrease from 13% in FY 2022-23. The EBITDA per metric tonne for the year stood at 713,005, reflecting our commitment to operational efficiency. As part of our strategic focus, we are actively reducing our net debt to minimise interest expenses. With a strong operating performance, we achieved a net profit of 75,273 crore in FY 2023-24.

• CSR Journal Excellence Award 2023: Awarded for contribution to the promotion of sports in rural and tribal areas.

• Indian Social Impact Award 2024: Awarded for Best Sports Welfare Initiative of the Year.

• AIBCF CSR and Sustainability Award 2024: Awarded for outstanding achievements and contributions in the field of water conservation and management.

• Odisha Leadership Award 2024: Awarded for Sustainable Community Development.

• Kalinga CSR and Sustainability Excellence Award 2024 - Gold Category: Awarded for exceptional contributions to community development in Odisha.

• Great Place to Work-Certified™: Awarded for creating an exceptional workplace culture based on Credibility, Respect, Fairness, Pride, and Camaraderie.

• Golden Peacock CSR Award: Awarded for recognising exemplary achievements in corporate social responsibility and demonstrating a strong commitment to sustainable and impactful CSR practice.

Consolidated Performance Highlights

Gross revenue for FY 2023-24 amounted to 758,115 crore, slightly lower than the previous fiscal years 760,562 crore. Correspondingly, net revenue also experienced a slight decline, totalling 750,183 crore compared to 752,768 crore in FY 2022-23. Noteworthy growth was observed in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA), which increased to 710,231 crore in FY 2023-24 from 79,700 crore in FY 2022-23. Depreciation and amortisation expenses rose marginally to 72,822 crore in FY 2023-24, up from 72,691 crore in FY 2022-23. Finance costs totalled 71,294 crore in FY 2023-24, down from 71,446 crore in the previous fiscal year. Profit before tax (PBT) before exceptional items stood at 76,241 crore in FY 2023-24, reflecting 6.6% growth from 75,855 crore in FY 2022-23. Notably, no exceptional gains or losses were reported in FY 2023-24, contrasting with a loss of 71,369 crore in FY 2022-23. Reported profit after tax (PAT) from continuing operations surged to 75,943 crore in FY 2023-24, a substantial increase from 73,193 crore in FY 2022-23.

3.3 Business Performance (Global}

3.3.1 Mozambique

Our operations in Mozambique encompass 5 MTPA open-cast coking coal mines situated in the coal-rich Moatize region. The Chirodzi project, an open cast coking mine, specialises in producing Semi Soft Coking Coal (80% HCC 64 Mid Vol) and HGT Coal. Coking Coal sales for FY 2023-24 amounted to 780,789 KT, showing an increase from 759,029 KT in FY 2022-23. For the full FY 2023-24, the EBITDA reached USD 51.73 million, with a corresponding PAT of USD 24.16 million.

3.3.2 South Africa

JSPs Kiepersol Colliery is a notable producer of high-quality Anthracite Coal, boasting a maximum capacity of 1.2 MTPA. Additionally, we had secured a contract to establish a 600 MW coal-fired power plant in Botswana during the previous fiscal. The power generated will be supplied to the Botswana Power Corporation (BPC). Comparing FY 2023-24 to FY 2022-23, the EBITDA for FY 2023-24 plunged to USD 6.60 million from USD 30.98 million, with a corresponding PAT of USD 3.06 million in FY 2023-24 from USD 20.32 million in FY 2022-23.

3.3.3 Australia

Clearances have been obtained for the extraction of 3.7 MT of coal over a five-year period from the Russell Vale mine. During the financial year, the Company extracted 353,072 tonnes of Run of Mine (ROM). On or around 18th Jan 2024, the NSW Resources Regulators issued a Prohibition Notice under section 195 of the Work Health and Safety Act (2011) prohibiting the cutting/production of coal at RVC due to concern over the risk of fire or explosion. Following the prohibition notice, the management decided to scale down its operations and cut down the cost to a minimum. Management is evaluating all possible options including resuming operation and producing coal from a single pane.

3.4 Business Outlook

• Ramping up of coal mine operations and pellet plant will help in reducing cost

• We will continue to focus on value-added products which help us in improving overall realisation and margins

• Our expansion plans will further improve profitability through higher volumes and margin enhancement

• We will continue to focus on lower leverage by funding part of our capex through internal accruals and maintaining an optimum Net Debt to EBITDA ratio

4 Financial Performance 4.1 Standalone Performance

Particulars	FY 2023-24	FY 2022-23
Gross Revenue*	57,504	59,019
Net Revenue	49,766	51,229
Adjusted EBITDA**	10,124	8,562
Depreciation & Amortisation	2,216	2,166
Finance Cost (net)	921	1,286
PBT (before Exceptional)	7,151	6,130
Exceptional Gain/(loss)	-	(3,258)
Reported PAT/(loss)	5,273	2,427

Note:

! ‘Inclusive of GST (Goods and Service Tax) and Other Income

i "Adjusted for one-off FX Gain of 779 crore in FY 2023-24 and 7971 crore in FY 2022-23

4.2 Consolidated Performance

Particulars	FY 2023-24	(^ Crore) FY 2022-23
Gross Revenue*	58,115	60,562
Net Revenue	50,183	52,768
Adjusted EBITDA**	10,231	9,700
Depreciation & Amortisation	2,822	2,691
Finance Cost	1,294	1,446
PBT (before Exceptional)	6,241	5,855
Exceptional Gain/(loss)	-	(1,369)
Reported PAT/(loss)A	5,943	3,193

Note:

A Reported PAT/(Loss) from continuing operations * Incl. GST (goods and service tax) and Other income

** Adjusted for one-off FX Loss of H 30 Cr in FY 2023-24 and Fx Gain of H 235 Cr in FY 2022-23

4.3 Ratios

Particulars	FY2023-24	FY2022-23	Variance	Reason for Variance
Debtors turnover ratio (days)	12.1	8.3	47%	Due to increase in Average trade receivables during the year ended March 31,2024
Inventory turnover (days)	61.2	80.5	(24%)
Interest coverage ratio	14.2	8.1	74%	Due to increase in Profitability and decrease in Net Finance charges during the year ended March 31, 2024
Current ratio	1.1	0.9	14%	-
Debt equity ratio	0.2	0.3	(17%)	-
Net Debt to EBITDA	0.7	0.8	(10%)	Due to increase in profitability during the year ended March 31,2024
Operating profit margin (%)	20.4	18.5	11%	Due to increase in profitability during the year ended March 31,2024
Net profit margin (%)	10.5	4.8	122%	Due to increase in profitability during the year ended March 31,2024
Return on net worth (%)	11.6	5.9	94%	Due to increase in profitability during the year ended March 31,2024

5. Human Resources

Read more on Page 64-77

6. CSR

Read more on Page 82-91

7. Environmental Sustainability

Read more on Page 92-103

8. Technology

Read more on Page 60-63

9. Awards

Read more on Page 26

Risk Management Policy

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 decisionmaking 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.

Read more on Page 34-37

Internal Controls

The Companys internal control system is tailored to the scope, type, and scale of its operations. The Audit Committee provides additional oversight regarding financial risks and controls, while the Board of Directors and the Audit Committee ensure the adequacy and efficiency of internal financial controls. To address these issues, the Audit Committee holds regular meetings with the statutory auditor and management. The internal control system ensures the optimal use of the Companys resources and adherence to compliance standards.

Internal Audit

The internal audit department ensures compliance with prescribed business standards through regular monitoring. The audit team oversees internal processes and recommends necessary changes to address any deviations from established practices. Strict monitoring and effective reviews ensure high compliance with the Companys governing rules and regulations. Equipped with the necessary skills and experience, the internal audit team reports to the Chairman of

the Audit Committee and the Managing Director. With the Audit Committees approval, the team develops an annual Risk-Based Audit Plan (RBAP) to evaluate the effectiveness of internal controls. Audits are conducted according to this approved plan, and any identified gaps in the internal control system are communicated to process owners and management for corrective action. Significant matters are reported to the Audit Committee.

Cautionary Statement

This Report includes projections and estimates that constitute forward-looking statements. Actual results may differ from those expressed or implied herein. Important factors impacting the Companys operations include economic conditions affecting demand, supply, and price in domestic and international markets, changes in government regulations and policies, tax laws, and other relevant factors. The Company assumes no obligation to publicly update or revise any forward-looking statements based on future events or new information. Actual outcomes may vary from those anticipated in this report.