Indias largest steelmaker on a transformative growth path
JSW Steel, the flagship of the JSW Group, is one of the leading and most diversified steel producers in India.
JSW Steel has continuously sustained its market position with the core strengths of agile operations, rich product mix, best-in-class technology, excellence in project execution, sustainable sourcing and consistent focus on employee engagement.
With the long-term growth potential for steel consumption in the Indian domestic market, JSW Steel has introduced an additional capital expenditure programme to expand its capacities at its plants, and to modernise and expand capacities of its downstream business.
Its fully integrated operations encompass mining, beneficiation, raw materials processing, steel manufacturing and manufacture of downstream value-added products. With a total installed capacity of 29.7 MTPA in India and overseas,
JSW Steel has embarked on a transformative growth path that would take its capacity to 38.2 MTPA by FY 2024-25, 43.5 MTPA by FY 2027-28 (September), and further to 51.5 MTPA by the end of FY 2030-31. The Company has earmarked an estimated Rs. 64,434 crore as capex to be spent over FY 2024-25 to FY 2026-27 to complete the capacity expansion to 43.5 MTPA, expand downstream capacity, mining projects, cost savings projects, sustaining Capex, and the modernisation of overseas facilities.
JSW Steels domestic roadmap to 50 MTPA is in alignment with Indias sustainable development aspirations. It has multiple projects in the pipeline to achieve this target viz. brownfield potential of 5 MTPA each in Vijayanagar and BPSL; 4 MTPA green steel plant in two phases, a 13 MTPA greenfield plant in Odisha and a greenfield Electric Arc Furnace facility in Andhra Pradesh.
JSW Steels manufacturing facilities are strategically located across India - Vijayanagar in Karnataka (12.5 MTPA), Dolvi in Maharashtra (10.0 MTPA), Salem in Tamil Nadu (1.0 MTPA), Jharsuguda (BPSL plant) in Odisha (3.5 MTPA), Raigarh and Raipur plants in Chhattisgarh (1.2 MTPA) - and select overseas locations.
The Company has downstream capacity of -13.5 MTPA in India. Outside India, JSW Steel has a 1.5 MNTPA EAF-based steelmaking capacity in Ohio, US. Overseas downstream facilities include a 3 MNTPA hot rolling mill in Ohio, a 1.2 MNTPA plate mill and a 0.55 MNTPA pipe mill capacity in Baytown, Texas, US, and a 1.3 MTPA long product capacity in Italy.
In India, downstream facilities comprise the coated products division at Vasind, Tarapur Kalmeshwar Works and Khopoli in Maharashtra, Bawal in Haryana and Rajpura in Punjab, in addition to the downstream facilities at Vijayanagar and BPSL downstream plants at Jharsuguda in Odisha, Chandigarh in Punjab and Kolkata in West Bengal. Its downstream facilities also include the plate and coil division at Anjar in Gujarat.
JSW Steel has one of the largest distributor and retailer networks in India. The Company has also established a strong export presence spanning 100 countries.
1SW Steel has a wide range of product offerings that cater to diversified end markets across geographies. The Company has significantly expanded its product portfolio through a mix of acguisitions, downstream capacity expansions and joint ventures with other leading steel companies.
1SW Steel believes that the breadth of its product range gives it the flexibility to adapt its product mix to market demands and enables it to sustain its business and operations through adverse economic conditions.
Integrated manufacturing, reinforcing cost leadership
1SW Steels strategically located operations, state-of-the-art manufacturing, captive resources, and resilient business model have enabled the Company to establish itself as a leader on the global conversion cost curve. Further, the Company remains focused on strengthening its backward integration to optimise costs and reduce external dependencies. In addition, 1SW Steel is leveraging technology, analytics as well as its innovation capabilities to further improve efficiencies.
1SW Steel has secured 24 iron ore mines and 3 coking coal mines in India through open auctions to improve its raw material self-sufficiency. Of the total 24 iron ore mines, 13 iron ore mines in Karnataka and Odisha are operational, with the rest at various stages of exploration and commissioning. The 3 coking coal mines are expected to start mining operations over the next two years. The Company has also built the worlds largest pipe conveyor system, which extends 24 km from the captive mines in Karnataka to the Vijayanagar plant to transport iron ore fines. This is an environment-friendly logistics solution for the transportation of iron ore from the mines to the Vijayanagar plant and results in cost savings by way of reduction in transportation costs.
Best positioned amongst private steelmakers facing iron ore lease expiries
In India, public sector companies have the provision to extend their leases by another 20 years upon expiry while leases of private sector firms do not have such provisions. Given the impending expiries of low-cost legacy leases until 2030, the premium recorded during recent auctions, and limited clarity on renewal cost jump, mining profitability could come under severe pressure. Against this backdrop, 1SW Steel is best positioned as the Company doesnt have any legacy, low-cost captive mines. Further, the Company won its mining (including coking coal) leases through auctions, and the operationalised captive mines now account for 33% of its iron ore consumption.
In the auction conducted by the Government in April 2015,1SW Steel won the Moitra coking coal block, located in Jharkhand state, which has a total extractable coal reserve of approximately 30 MT. Moitra coking coal block has coking grade coal and is in advanced stage of development and can provide 1 MTPA of coking coal. To further strengthen backward integration, 1SW Steel won the Parbatpur and Sitanala coking coal mines in India through auctions, which when commissioned, will provide
1.5 MTPA of coking coal at a lower cost than imports. Further, the Company has been actively scouting for coking coal resources globally, and in May 2024, it announced the acguisition of the Minas de Revuboe mine in Mozambigue, which has over 800 million tonnes of high - guality hard coking coal reserves.
1SW Steel is also setting up a 30 MTPA slurry pipeline from the mines to latadhar port, including the grinding and filtration plant. Slated for commissioning in FY 2026-27, the slurry pipeline will provide an environment-friendly logistic solution for transportation of iron ore from Odisha mines to the latadhar port
Strategic acquisitions/partnerships to boost capacity and capabilities
1SW Steel has entered into strategic joint ventures as well as acguired eguity interests in various entities which has enabled the Company to add more value- added products, enhance global footprint, secure raw materials, achieve backward integration and increase technological know-how.
1SW Steel has entered into a 50:50 joint venture with UK-based Severfield UK PLC, which provides structural steel building solutions. Severfields manufacturing facility is located at Vijayanagar within the premises of 1SW Steels plant and has a capacity of 1,00,000 tonnes (165,000 tonnes including associate sub-contractor facilities) per annum. The product portfolio includes engineering, fabrication and erection of structural steel. They also provide cutting-edge flooring technology with composite metal decking through Structural Metal Decks Limited, UK.
1SW Steel also has a joint venture with Marubeni-ltochu Steel (1SW Ml Steel Service Centre Private Limited) to set up steel service centres in north and west India for just-in-time solutions for the automotive, white goods and construction sectors.
The Company has also pursued unigue opportunities in stressed assets in niche markets.
| Companies acquired through IBC | Capacity | Year of acquisition |
| JSW Ispat Special Steel Products Limited | Crude steel 1.2 MTPA | August 2019 |
| Bhushan Power and Steel Limited | Crude steel 2.75 MTPA (now 3.5 MTPA) | March 2021 |
| Asian Colour Coated Ispat Limited | Downstream 1 MTPA | October 2020 |
| Vardhaman Industries Limited | Colour coating 60,000 tonnes per annum | December 2019 |
| National Steel and Agro Industries Limited | Downstream 350,000 tonnes per annum | May 2023 |
Diversified portfolio with focus on value-added products
JSW Steel has a wide range of product offerings that cater to diversified end markets across geographies. Its relentless focus on RSD and innovation has led to the development of a diversified portfolio of value-added products. The breadth of the product range provides the Company the flexibility to adapt its product mix to market demands and remain resilient to adverse macroeconomic conditions.
JSW Steels portfolio includes hot-rolled, cold-rolled, coated, colour-coated, tinplate, alloy steel and electrical steel products. Its long product range comprises TMT bars, wire rods, rails, grinding balls and special steel bars. These products are widely used in automotive, general engineering machinery projects and construction applications.
JSW Steel is the leading provider of value-added and special steel products (VASP). The Company manufactures a wide range of value-added flat steel products, such as medium to high carbon steel, high tensile and high strength low-alloy steel grades for the automotive sector, API grade steel for the oil and gas sector, cold rolled close annealed coils, customised galvanised and galvalume products for the solar sector, galvanised products and colour coated products in the flat product segment and rebars, wire rods and structural steel in the long product segment. The Company has one of the largest galvanising and galvalume capacities in India. Further, it has the largest coated capacity in India and one of the largest globally. It has export footprint in more than 100 countries.
Aligned with its focus on innovation and customer-centric solutions, 1SW Steel introduced 51 new grades of steel during FY 2023-24, including 21 import substitution grades and 15 grades of advanced high strength steel (AHSS). The Company received 48 new product approvals during the period under review. Further, to enhance special steel offerings, 1SW Steel entered into a joint venture with 1FE for establishing a cold-rolled grain-oriented (CRGO) mill at Vijayanagar, making it Indias first end-to-end CRGO product line.
Expanding and scaling digital to best-in-class
1SW Steel is transforming every aspect of its business by embracing the best available and emergent technologies across functions - Finance, Human Resources, Manufacturing, Mining, Marketing, and Supply Chain. Harnessing the power of Big Data, Advanced Robotics, Hybrid Cloud and Artificial Intelligence, the Company is driving cultural change, augmenting customer experiences, and developing innovative products. Digital initiatives are enabling 1SW Steel to improve safety, optimise cost, drive seamless integration of operations, improve product value, and enhance customer delight.
1SW Steel is transforming its mining operations by digitalising mine planning and operations, fuel management system, logistics, and health and safety, which also leads to enhanced productivity and efficiency. Under Project Samarth, the Companys finance function is undergoing a comprehensive digital transformation with 38 out of 58 initiatives already implemented. Under Project Sampark, 1SW Steel is undertaking end-to-end transformation of logistics. The Company has implemented the Digital Logistics Management System (DLMS) at its Vijayanagar and Dolvi plants, for outbound logistics while it is under implementation for in-bound and in-plant logistics.
Project Sampark, when complete, will deliver significant benefits in the form of reduced logistics costs, reduced vehicle turn-around-time (TAT), enhanced workplace safety and complete visibility of vehicle movement inside plants. To further improve operational analytics and decision-making, the Company deployed the Integrated Control Tower (ICT) at the Vijayanagar, Dolvi and Salem plants. The ICT provides real-time analytics and dashboards for plant operations. Further, the Central Command Centre at the 1SW Mining Barbil office enables centralised monitoring and control of mining operations.
Sustainability at the core of the enterprise
Sustainability is deeply entrenched into JSW Steels business growth strategy.
The Company has identified and established 17 sustainability focus areas, setting ambitious targets to continuously monitor progress, and enhance performance every year. The governance and oversight has been entrusted to the Board-level Business Responsibility and Sustainability Committee. 1SW Steel is committed to no harm to the environment, people and society.
Accelerating decarbonisation and low-carbon steelmaking
In January 2024, the Board approved JSW Steels commitment to achieving a status of net neutral in its carbon emissions by 2050, significantly ahead of Indias Net Zero commitment of 2070. This will be achieved through a range of short-term, medium-term and long-term initiatives. In the short term, the Company is focusing on increasing the share of renewable energy, improving raw material guality, energy and process efficiency, and increasing scrap usage, among others. In the long term, key levers include utilising syngas, adopting green hydrogen, transitioning to scrap- based electric arc furnaces, carbon seguestration through natural and technological solutions, and large-scale adoption of Carbon Capture, Utilisation and Storage (CCUS). JSW Steel also published its first Climate Action Report to provide a detailed outline of its progress and future endeavours towards decarbonisation. Read it here.
JSW Steel launched the SEED Program, a decarbonisation initiative which focuses on process and energy efficiencies involving the workforce. Through this initiative, JSW Steel has identified potential abatement opportunities of more than 18 MnT of C02 emissions by 2030. JSW Steel is the first manufacturer in India to receive the prestigious GreenPro ecolabel for its Automotive Steel products. The GreenPro ecolabel, developed by the Confederation of Indian Industrys (CM) Green Business Centre, recognises the highest standards of environmental sustainability and product performance in the Indian manufacturing sector.
Collaboration with India Hydrogen Alliance (IH2A)
JSW Steel joined the India H2 Alliance (IH2A) to drive the transition to cleaner energy. IH2A is an industry coalition focused on creating a hydrogen value- chain and economy in India. With the participation of government agencies, sustainability think- tanks, and private sector partners, IH2A aims to reduce hydrogen production costs, promote the growth of a local hydrogen supply chain, and support Indias Net Zero carbon goals. As the Steel and Cement Work Group Lead within the India H2 Alliance (IH2A), JSW Steel will collaborate with industry leaders and government entities to establish a shared vision for the commercialisation of hydrogen in the steel and cement industries. By exporting green steel produced with hydrogen, the Company can position India as a global leader in the hydrogen value chain and integrate hydrogen into the industrial supply chain.
Building future-ready workforce; imbibing strong safety culture
JSW Steels ability to deliver industry-leading growth, operational excellence and retaining its competitive edge hinges on the dedication and skills of its workforce. Talent management is a pivotal part of the Companys strategic framework.
In addition to providing industry-competitive compensation, the Company offers extensive learning and career development opportunities. Celebrating diversity and inclusion, JSW Steel fosters a culture where all employees feel valued and empowered. By leveraging digitalisation, the Company enhances employee capabilities and operational efficiency and productivity, building a future-ready workforce that will continue to shape JSW Steels journey in the coming decades.
Further, JSW Steel is committed to building a strong health and safety culture, aligned with the Companys vision of zero harm. It has been investing in capacity building and has undertaken several initiatives that have started delivering results. The Company conducted a Safety Culture Survey of the workforce, including contract workmen at JSW Raigarh. It has also deployed camera-fitted helmets for monitoring high-risk and critical operations in real time at JSW Dolvi and BPSL, among others.
Making a difference to more than a million lives
JSW Steels commitment to society is rooted in its ethos of Better Everyday. The Company, through JSW Foundation, has adopted a transformative approach to deliver positive change across its key focus areas of health and nutrition; education; water, environment and sanitation; waste management; agriculture; skill development; sports; and art, culture and heritage. The programmes under the chosen focus areas are designed in such a way that they are scalable, replicable and sustainable, and involve engaging diverse stakeholders, fostering community participation at the grassroots level. In FY 2023-24, these initiatives covered 575 villages across India and made a difference to more than a million lives.
Economic
Review
2.1.
Global Economy
Economic growth resilient;
hard landing fears recede
The global economy demonstrated strong resilience, navigating multiple headwinds such as the ongoing Russia-Ukraine war, escalating geopolitical tensions in the Middle East, and the cost-of-living crisis in several economies. The International Monetary Fund (IMF) in its World Economic Outlook (WEO) April 2024 estimated global GDP growth at 3.2% for 2023, which was an upward revision of 0.1% point from its January 2024 update, driven by strong private consumption and government spending initiatives, particularly in the US and many emerging market economies. The services sector demonstrated strength, but manufacturing activity remained subdued.
The economic growth was, however, divergent - with the US growing faster than estimated among advanced economies while the UK and Europe barely avoided a recession. India remained a bright spot, globally and among advanced economies. China remained saddled with the continued weakness in its property sector. The absence of a comprehensive policy package for the beleaguered property sector, a prolonged drop in real estate investments, a bleak housing price outlook, and reduced housing demand further weighed on household confidence and spending. Meanwhile, the positive effects of the post-pandemic boost to consumption and fiscal stimulus have started to wane in China.
Although headline inflation has fallen across countries, core and services disinflation has been slow amid the continued tightness in labour markets. In response, major central banks in advanced economies (AEs) kept their policy rates on hold as inflation is yet to align with their targets. A faster-than-expected decline in inflation fuelled expectations of an early reversal in the US monetary policy cycle, leading to a sharp correction in sovereign bond yields in November and December 2023. Yields have, however, hardened since the beginning of 2024 as central bank communications pushed back on market exuberance related to the magnitude and pace of monetary policy easing. Following the correction seen in Q3 2023 (luly-September), global eguity markets posted strong gains in November-December, primarily in AEs.
Outlook
The IMF expects global economic growth to remain at the 2023 level of 3.2% in 2024 and 2025 as well, with global headline inflation moderating further from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025. It expects advanced economies to achieve their inflation targets ahead of their emerging and developing counterparts. With many countries going into elections in 2024, the economies could receive short-term fiscal boost, and central banks may cut rates at the latter half of the year, should the last leg of the disinflation process get completed.
In advanced economies, growth is anticipated to marginally increase, primarily driven by a recovery in the Euro area following a period of sluggish growth in 2023. In contrast, emerging market and developing economies are poised for stable growth, albeit with regional disparities. Monetary policy expectations vary across major economies, with projections indicating a mix of adjustments. The US Federal Reserve is likely to cut its policy rate, alongside similar moves by the Bank of England and the European Central Bank. Japan is expected to gradually increase policy rates, reflecting growing confidence in achieving sustainable inflation targets. In China, domestic demand remains lacklustre and is likely to remain so unless strong measures and reforms address the root cause. With depressed domestic demand, surplus could arise, which will further impact trade tensions in an already tense geopolitical environment.
In the US, growth is holding up well with resilient labour markets and consumption. The disinflationary process remains on track, albeit with some speed bumps, dampening rate cut expectations. In the Euro area, consumption and manufacturing remain weak but growth appears to be bottoming out and expected rate cut in the near term on soft inflation prints could provide support to recovery. Meanwhile, China demonstrated strong growth in the first guarter of 2024, with positive trend in manufacturing and auto. FAI ex-real estate development was up 9.3%. Japan could witness a modest recovery from the lows of recent guarters, supported by wage hikes and growth in exports.
On the fiscal policy front, the IMF expects governments in advanced economies to tighten fiscal policies in 2024 and beyond. This tightening is evident in projections for the structural fiscal-balance-to-GDP ratio, which is anticipated to rise notably in the US and the Euro area. Emerging markets and developing economies are likely to maintain a broadly neutral policy stance in 2024, with slight tightening anticipated in 2025.
Markets reacted positively to the prospects of central banks exiting tight monetary policy. Financial conditions eased, eguity valuations soared, and capital inflows to emerging market economies were buoyant. Further, with the economic impact of the pandemic unlikely to be as high as previously estimated, it bodes well for the overall sentiment. Resilient growth, inflation easing, favourable supply developments, fading energy price shocks, rebound in labour markets, decisive monetary policy actions, and improved monetary frameworks have helped anchor inflation. These are positive developments.
However, challenges remain - core inflation has yet to come down, service inflation remains high, and there is divergence in economic growth across countries. In addition, China needs to be watched closely as domestic demand remains lacklustre. Real interest rates are high, medium-term growth prospects are weak due to lower productivity growth, and huge investments are needed for a green and climate resilient future.
2.2. Indian Economy
Growing at a faster- than-expected clip, inflation moderating
India remained the fastest growing major economy in the world in FY 2023- 24, with its real GDP estimated to have grown by 8.2%, according to the data released by the Ministry of Statistics and Programme implementation (MoSPI), compared to 7.0% in FY 2022- 23. This projection came in above the second advance estimates of 7.6% in February 2024, as the economy recorded 8%+ growth for three consecutive guarters on the back of the Governments continued spend on infrastructure and housing, robust private consumption and buoyant manufacturing and services sectors.
Manufacturing and construction buoyant on government push
Real gross value added (GVA) is estimated to have grown by 7.2%, driven by 9.9% growth in the manufacturing sector, construction at 9.9% and services at 7.5% while agriculture remained weak, at just 1.4%. Manufacturing GVA accelerated, as easing input costs boosted corporate profitability. Industrial activity was also supported by the sustained momentum in mining and electricity generation. Gross fixed capital formation, constituting 34% of the GDP, accelerated to 10.2% from 6.6% in the earlier period, reflecting the Union governments thrust on infrastructure- led capital expenditure and housing.
Sustained capacity utilisation above 75% should help start the private sector investment cycle, further supported by the increase in profitability of corporates and strong bank balance sheets with double-digit growth in credit.
In its Interim Budget for FY 2024-25, the Union government earmarked a record Rs. 11.1 lakh crore of capital expenditure, up 11.1% from the year earlier period, in line with its infrastructure development-led push to drive sustained economic growth. Further, the Government announced plans to build two crore more houses under the PM Awas Yojana (PMAY) to account for the increase in the number of families as it inched closer to its target of building three crore houses under the scheme.
Trade flows resilient amid geopolitical tensions
Indias overall exports recorded a marginal increase to US$776.68 billion in FY 2023-24, despite global headwinds, according to provisional data released by the Ministry of Commerce, driven by strong services exports, partially offset by a 3.1% fall in merchandise exports, as the ongoing Russia-Ukraine war, the tensions in West Asia, and disturbances in the Red Sea route led to a continued surge in freight rates, along with a spike in insurance costs.
Meanwhile, Indias current account deficit improved significantly to 0.7% of GDP, or US$23.2 billion in FY 2023-24, down from 2% in FY 2022-23, according to the RBI, which could be attributed to a decrease in merchandise trade deficit. In fact, the countrys current account balance turned a surplus of 0.6% of GDP in Q4 FY 2024, as against deficits in earlier guarters.
Inflation moderates keeping the central bank on a prolonged pause
Indias retail inflation moderated to a 5-month low of 4.8% in March 2024, but remained above the long-term target of 4% of the RBI. After a series of rate hikes to tame inflation, the RBI remained in a pause mode for seven consecutive Monetary Policy Committee meetings and maintained its accommodation of withdrawal stance. Prices of food, which has about 46% weight in the retail inflation basket, continue to be volatile, and a below-normal rainfall could adversely impact the RBIs inflation targeting.
Buoyant tax collections reflect strong economic activities
Gross direct tax collections before adjusting for refunds stood at Rs. 23.37 trillion in FY 2023-24, up 18.5% y-o-y with corporate tax revenue expanding over 13% y-o-y and personal income tax collections (including STT) growing 24.3% y-o-y. The figures were in line with the Governments revised estimates presented during the Interim Budget for FY 2024-25 in February 2024. Gross GST collections increased 11.7% year-on-year to Rs. 20.18 trillion. Based on provisional data released by the Ministry of Finance, direct buoyancy of 1.9 indicates that the growth in tax collections continues to outpace the rate of economic expansion and could provide more elbow room for the new government to raise its tax collection targets for FY 2024-25 when it presents the full Budget in July 2024.
Fiscal consolidation on track despite higher government spending
Despite 2024 being an election year, the Union government stayed on the path of fiscal consolidation, with Indias fiscal deficit estimates for FY 2023-24 narrowing to 5.8% and further to 5.1% for FY 2024-25, as per Interim Budget estimates. The target reflects the Governments intent to improve tax collections and lower subsidy, while raising capital spending and funding new welfare schemes. It also keeps India on track to achieve its goal of keeping the deficit below 4.5% of GDP in the next two years.
With the RBI transferring a record Rs. 2.11 lakh crore as dividend to the government for FY 2023-24, it would provide adeguate manoeuvring space to address any revenue shortfall or direct funds towards increased capex during the full Budget. Further, with the impending inclusion of the countrys sovereign bonds in the IP Morgan and Bloomberg emerging market indices, fiscal prudence and sustainable debt levels hold significant appeal to investors.
Outlook :
The Indian economy remains on a transformative growth path, demonstrating its inherent strength and resilience. Building on the strong foundations, India appears to be well on track to become the third largest economy over the next three years. Although challenges remain - both external and internal - the robust growth momentum continues to be led by the industrial sector and capital formation. Further, strong outlook for public housing, healthy growth in automobiles, elevated consumer confidence and moderation in inflation will support consumption growth. Expectations of above normal monsoon could boost rural recovery. Further, healthy forex reserves and positive outlook on capitals position India well to sustain its growth momentum.
However, a significant slowdown in global growth could impact India through trade and financial channels, while ongoing global supply disruptions may lead to increased volatility in commodity prices. Adverse weather conditions could rekindle inflationary pressures, prompting tighter monetary actions.
Most multilateral agencies, including the IMF and World Bank, have upgraded Indias growth forecasts for 2024 and 2025, amid caution surrounding geopolitical tensions, disruptions in trade flows, especially due to the volatile situation in the Middle East. The RBI pegs Indias economic growth at 7.2% for FY 2024-25 while expecting inflation to average 4.5%, down from 5.4% in FY 2023-24. Indias central bank expects improving employment conditions and moderating inflation, along with a rebound in agricultural activities, to boost consumption.
FY 2024-25 GDP Forecast (%) Revisions
| Earlier | Revised | |
| IMF | 6.5 | 6.8 |
| World Bank | 6.4 | 6.6 |
| ADB | 6.7 | 7.0 |
| RBI | 7.0 | 7.2 |
Growth momentum likely to continue with positive trends across key sectors and a resilient macro-economic profile
Steel at the heart of economic progress
Indias steel demand is likely to witness strong growth, driven by continued investments in infrastructure and urban development, growing manufacturing-led industrialisation and rising aspirational consumption such as consumer durables and automobiles. Infrastructure and construction accounts for 60-65% share, automobiles 9-10% of automobile, general engineering 25-26% and appliances, packaging and others 2-3%.
India is the worlds second largest producer and consumer of steel, but the countrys per capita steel consumption remains significantly below the global average, providing robust growth headroom. Further, during FY 2023-24, elasticity of steel demand to GDP growth was at 1.8, which assumes significance in the context of a contraction in global finished steel demand in CY 2023. The elasticity of steel demand with urbanisation rate is even higher at 3.0. Together, these factors should continue to drive steel demand growth.
Industry
Overview
3.1 Global steel industry
After two years of volatility, global steel demand is likely to stabilise but growth is expected to remain weak over the next two years, even as the global economy demonstrates remarkable resilience to several headwinds like Russias invasion of Ukraine, escalating geopolitical uncertainties, high inflation and conseguent monetary tightening. During the reporting period, higher interest costs, coupled with tighter credit conditions, weighed heavily on manufacturing and housing in most major markets.
Steel demand in China, the largest producer and consumer in the world, remained weak as the countrys property sector outlook, along with construction activities, remained bleak. Further, the countrys ongoing transition from an investment-stimulated to a consumption- driven economic growth model is expected to limit its contribution to global steel demand growth.
In this scenario, India has emerged as an outlier in the global steel industry, with its young, growing and aspiring population offering its economy the labour and consumer strength to drive growth. Further, large untapped opportunities for growth and development across social, industrial, infrastructure, and defence, coupled with continued policy support and structural reforms, bode well for economic growth. Thus, steel demand could outpace economic growth for a sustained period, as the country is in a nation building phase.
In CY 2023, world crude steel production stood at 1,892 MnT in 2023, largely flat y-o-y, according to the World Steel Association (Worldsteel), as steel producers reduced output in response to weak demand and volatile raw material costs and steel prices. China recorded production of 1,019 MnT, unchanged y-o-y while Indias steel production grew 12.3% to 141 MnT. lapans production fell 2.5% to 87 MnT while the US recorded a marginal increase to 81 MnT.
Top 10 steel producina countries in 2023
| Country | CY 2023 (MnT) | Change(%) |
| China | 1,019.1 | 0.0 |
| India | 140.8 | 12.3 |
| Japan | 87.0 | -2.5 |
| US | 81.4 | 1.1 |
| Russia | 76.0 | 6.0 |
| South Korea | 66.7 | 1.4 |
| Germany | 35.4 | -4.1 |
| Turkiye | 33.7 | -4.0 |
| Brazil | 31.8 | -6.7 |
| Iran | 31.0 | 1.3 |
Global trade flows are expected to remain volatile due to ongoing geopolitical tensions and protectionist policies. Regional conflicts and unrest such as the war between Russia and Ukraine and situation in Israel and elsewhere have been contributing to rising oil prices and further geo-economic fragmentation, affecting normal trade flows.
3.1.1 Steel Prices
Global steel prices experienced significant volatility during the year due to a combination of local and global issues. In the early part of FY 2023-24, steel prices in the US and Europe were elevated but they began to decline as China increased its steel exports. In China, continued weakness in the property sector negatively impacted steel prices last year. However, anticipated production cuts in China and healthy demand ex-property sector could potentially support steel prices.
The Eurozones economy stagnated in 2023, and the outlook for 2024 remains challenging amid weak demand and escalating geopolitical tensions. Nevertheless, expected interest rate cuts in Europe and the US should aid in demand recovery and provide support for steel prices moving forward. In India, domestic demand is expected to remain strong, thereby supporting prices even as imports remain a threat.
Long products
Rebar/TMT prices were volatile in all the major markets, due to a mix of seasonal factors, local supply-demand imbalance and policy impact. On a year-on-year basis, rebar prices were weak. Chinas steel production rebounded in early January and weighed on domestic prices while steel inventories remained at elevated levels, reflecting weak demand outlook prevailing in the domestic market. Indias domestic rebar prices were impacted by increased supply from secondary players. US and EU domestic rebar prices remained flat.
Flat products
Similar to rebar, HRC prices were also volatile in 2023 in major markets, due to a mix of seasonal restocking and domestic supply-demand imbalance in major markets. On a year-on-year basis, HRC prices have increased in the US and EU, and have weakened in China, on elevated steel production and subdued demand due to ongoing issues in the property sector. Meanwhile, India HRC prices remained range bound on the back of strong domestic demand offset by higher imports.
3.1.2 Raw material costs
Prices of 62% iron ore grade ranged between US$95/tonne to US$136/tonne in FY 2023-24. Iron ore prices witnessed positive momentum in early 2023 on elevated steel production in China but started moderating and briefly fell below US$100/tonne in May and remained range bound till June-July 2023. It bounce backed thereafter on the hope of strong stimulus in China which would drive steel demand and production, thereby boosting demand for iron ore. Iron ore prices are again inching lower in middle of 2024 on elevated production from miners in Australia and Brazil and weakening demand outlook.
Hard Coking Coal prices, FOB Australia ranged from US$220/tonne to US$375/tonne during FY 2023-2024. Healthy demand, especially from India, and the absence of production cuts in China along with supply constraints ensured that coking coal prices remained well above US$200/tonne during the year. Accidents and rising safety inspections in China also ensured elevated demand for imported coking coal.
Coking coal prices are likely to remain range bound going forward while iron ore prices could see some decline on potential steel production cuts in China.
Outlook :
Global finished steel demand is expected to increase by 1.7%
(30 MnT) y-o-y in CY 2024. Demand in China is expected to remain flat with the entire growth being driven by World ex China. India, the Euro area, ASEAN and Turkiye are expected to see demand increase of 11 MnT, 4 MnT, 3 MnT and 3 MnT, respectively. Notably, India will contribute 37% of the incremental steel demand in CY 2024. Moderate growth is also expected in the US, Middle East and Africa with 2 MnT each, while for lapan and Korea, it is expected to remain at the same level in CY 2024 versus CY 2023.
In China, steel demand signals a potential shift away from a real estate and infrastructure- driven economic model towards manufacturing and energy transition. India emerges as a key driver of steel demand growth. Similarly, other emerging regions like MENA and ASEAN are anticipated to experience accelerating growth in steel demand after a slowdown in previous years.
In the developed world, the EU and UK have faced significant challenges including geopolitical uncertainties, high inflation, partial withdrawal of fiscal support and high energy prices in 2023. After only a technical rebound in 2024, the regions steel demand is expected to finally show a meaningful recovery with a 5.3% growth in 2025. In contrast, the US demonstrates healthy steel demand fundamentals, poised for a guick return to growth in 2024 after a slowdown in 2023, supported by strong investment activity.
A faster-than-expected disinflation accompanied by monetary policy easing could provide a significant boost to steel-consuming sectors, particularly construction. Further, an acceleration in global decarbonisation efforts or in efforts to strengthen public infrastructure against rising climate change risks are significant positives supporting global steel demand. Further, escalation in geopolitical tensions, high and rising public debt levels triggering fiscal consolidation in major economies, and the last leg of disinflation proving to be longer than expected could weigh heavily on the economic recovery and thus steel demand.
3.1.3 Demand outlook for major consumption sectors
Automotive
In 2023, the automotive sector bucked the overall weak trend in manufacturing, showing signs of a long-awaited strong recovery on pent-up demand and easing supply chain constraints. However, this strong growth in major auto producing countries is unlikely to sustain into 2024. While global passenger and commercial vehicle sales remained strong, the global automotive industry faced multiple headwinds like slowing growth of EV sales, rising costs, among others.
Infrastructure/construction
High interest rates and construction costs continued to weigh on the construction sector, negatively impacting steel demand across most major steel-using regions in 2023. Further, weakness in housing activity in the US, China, Japan and the Euro area is expected to continue into 2024 in most major markets, driven by the lagged impact of monetary tightening, and any meaningful recovery could start to play out only in 2025.
Manufacturing
Global manufacturing activity remained weak in 2023 on the back of high costs and uncertainties, tight financing conditions and muted demand, which adversely impacted global steel demand in 2023. According to the Short Range Outlook, leading indicators point to the start of a recovery in global manufacturing activity in 2024. Further, as major economies focus on developing strategic sectors and ensure supply security for strategic components against the backdrop of escalating geopolitical tensions, investments in manufacturing and infrastructure could receive a boost, underpinning global steel demand.
3.2 Indian Steel Industry
3.2.1 Demonstrating fundamental strengths
India is the second-largest producer of crude steel in the world. During FY 2023-24, domestic crude steel production rose 13.2% y-o-y to 144.04 MnT, while finished steel consumption increased 13.6% y-o-y to 136.25 MnT, driven by robust domestic demand on the back of the Governments continued spend on infra and housing, the increasing share of manufacturing in GDP, and strong demand from the automotive segment. However, margins of domestic steelmakers came under pressure due to volatile commodity and energy costs, and the surge in low-cost imports putting more pressure on steel prices.
3.2.2 India Steel Trade
During FY 2023-24, India turned a net importer of steel as cheaper imports from Asia, especially China, made their way into the domestic market. Overall, steel exports (finished+semis) increased by just 2.5% to 8.54 MnT, due to the weak global demand environment, while steel imports jumped 37% y-o-y to 9.65 MnT. Imports from China increased 93% y-o-y to ~2.7 MnT while that from ASEAN countries and Japan jumped by 75% y-o-y and 52% y-o-y to ~1.7 MnT and ~1.3 MnT, respectively. The rising level of imports poses a significant risk to domestic steel prices and margins. Meanwhile, Europe emerged as the single largest destination for Indian steel exports, accounting for 55%
(~4.7 MnT) of the total.
Overcapacity in Asia and impact on India steel trade
The global steel industry has witnessed a sharp increase of surplus capacity, rising by almost 4x from 180 MTPA in 2000 to as high as 610 MTPA in 2023, which implies the surplus equivalent to global demand growing from 21% in 2000 to 33% in 2023. The combined surplus of China, Japan and Korea grew over 6x, from 80 MTPA in 2000 to 425 MTPA in 2023, accounting for two-thirds of the global surplus capacity. Further, the shift from globalisation to localisation poses significant threat to free and fair trade for India, as well as additional threat of trade diversion from conventional net exporting countries with a declining export space. India, which has been outperforming globally with robust economic and steel demand prospects, needs to have trade measures to arrest surging imports of both steel and steel-intensive manufactured goods, which otherwise could derail the countrys robust steel demand.
3.2.3. India steel demand drivers
Infrastructure and construction
India has been building physical infrastructure over the past decade at a scale and pace never seen before. From roads and highways to airports, dedicated freight corridors to ports and airports, high speed railway to metro networks, this thrust on infrastructure is driving growth in the construction sector, leading to demand for steel. The NHAI pipeline for the next three years remains strong and InvITs are gaining traction with continued interest from foreign players. Further, Indias focus on normalising logistics cost from 14% of GDP to 8-9% in the next few years under the PM Gati Shakti initiative is also likely to boost steel demand.
Further, with focus on urbanisation, India is building megacities and smart cities with robust digital infrastructure, which is leading to an uptick in domestic steel demand. Urban residential real estate cycle continues to be strong with robust, new launches and high affordability, despite higher interest rates. The renewables sector is also witnessing large investments driven by increasing power consumption and the need for green energy transition. The NIP, PLI scheme and defence indigenisation are driving private capex.
Manufacturing
The India government launched the Make in India initiative in 2014 to maximise domestic value-addition and put the country on a manufacturing-led growth path, strengthen self-reliance and boost employment opportunities. The initiative envisages an increase in the share of manufacturing from 17% to 25%, employing over 100 million.
The steel sector, although not included in the initiative, has a pivotal role in its success, as steel is consumed extensively for manufacturing. Moreover, the drive to increase the share of MSMEs to GDP from 30% to 50% is likely to equally support manufacturing growth, and thus steel demand.
Automotive
In FY 2023-24, the Indian auto sector witnessed healthy demand for passenger vehicles (PV) and commercial vehicles (CV) as chip availability corrected. The outlook for two-wheelers and tractors is improving. Further, the rural economy is expected to recover on better winter crop, elevated reservoir levels and moderating inflation. With large demand incentives for electric vehicles (EV) from both central and state Governments, there is going to be a major shift towards EVs. Infrastructure boost and capex investments by the government augurs well for the HCV and tractor segments going forward.
The auto sector also benefits from the PLI boost.
EUs carbon border tax and Indias transition to green steel
The European Commission has proposed the worlds first carbon border tax under the Carbon Border Adjustment Mechanism (CBAM) on imports of carbon-intensive goods, including cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. On October 1, 2023, the CBAM entered into application in its transitional phase, where CO2 embedded emissions of products exported to EU are to be reported. CBAM will apply in its definitive regime from 2026, while the current transitional phase lasts between 2023 and 2025. CBAM levies a tax based on the quantum of emissions recorded during the production of such products that enters into the region. Indias steelmaking accounts for ~12% of the countrys total carbon emissions. Indian steel counts Italy, Belgium, Spain and the UK among its top 10 export destinations. While the impact on exports in the long term is still being evaluated, the country has embarked on a journey to transition to green steel. Aligned with Indias commitment to achieving Net Zero by 2070, the steel ministry has laid down a short, medium and longterm transition roadmap that includes the increased adoption of renewable energy and promotion of resource efficiency (until 2030), green hydrogen and carbon capture, utilisation and storage (2023-47) and disruptive technological innovations (2047-70).
Further, under the National Green Hydrogen Mission (NGHM), steelmaking has been allocated ~30% of the pilot project budget of H19,744 crore, to be deployed by 2030.
Outlook
India remains a bright spot in the global steel industry and the steel demand in the country is expected to show a healthy growth, driven by strong economic growth of 7.2% projected for FY 2024-25, a record H11.11 lakh capital expenditure for FY 2024-25, buoyant demand from major steel consuming sectors like infrastructure and construction, automotive, capital goods as well as consumer durables. Further, the positive investment climate, on the back of strong corporate profitability as well as robust bank balance sheets, bodes well for private investment cycle to kick off. In addition, the Governments plan to build additional two crore house under the PM Awas Yojana bodes well for the public housing sector outlook. Further, low inflation expectations for FY 2024-25 at 4.5% versus the FY 2023-24 average of 5.4%, could prompt the countrys central bank to pivot to policy easing, which could further boost demand. With the central government staying on course to its fiscal consolidation path, with fiscal deficit estimated at 5.1% for FY 2024-25 versus 5.6% in FY 2023-24, it provides further headroom for the Government to spend on physical and social infrastructure.
According to the NITI Aayog, India has the potential to become the worlds production centre for green steel and pave the way for its worldwide adoption. The Indian steel industry is leveraging the power of Machine Learning (ML), artificial intelligence (AI), and smart manufacturing to improve efficiency and strengthen sustainability.
Business
Review
JSW Steel is committed to superior performance, leveraging its cutting- edge, fully integrated manufacturing facilities and a diverse product portfolio that provides high-value additions. Strategically positioned, the Company is well-eguipped to capitalise on both existing and emerging opportunities, addressing a broad spectrum of customer needs as both India and the global community emphasise sustainability.
With a strong focus on innovation, digitalisation, and sustainability, JSW Steel continues to deliver robust results across various performance indicators.
For FY 2023-24, the Company achieved 101% of its production guidance, with average India capacity utilisation at 92%, and 100% of its sales guidance.
Exports performance
In FY 2023-24, JSW Steel outperformed the general market in steel exports, registering a 23% increase compared to 12% growth seen across India. This achievement drove JSW Steels share of total national steel exports to 45%. Moreover, the Companys export component within its total sales mix rose to 14%, up from 13% the previous year. Notably, exports of CRM products surged by 36%, while coated products saw a remarkable 52% increase, highlighting JSW Steels focus on higher-value export segments.
Domestic Performance
Share of domestic sales is 86% in the total sales mix. Volumes grew by 8%.
Contributing to Indias High Speed Rail Journey
JSW Steel is actively supplying high-strength TMT Bars, HR Plates, and LRPC for the Mumbai- Ahmedabad High-Speed Rail (MAHSR) project. The MAHSR route, spanning over 500 km, is currently under construction. Looking ahead, we are anticipating the upcoming Varanasi-Delhi bullet train project, which will cover an estimated distance of 865 km. A detailed project report for this venture has already been submitted. Committed to providing top-tier steel, JSW Steel remains dedicated to supporting Indias ambitious infrastructure projects.
Hyundai Motors awarded JSW Steel the Excellence in Customer Delight award at their Annual Vendor Meet FY 2023-24.
Maruti Suzuki India Ltd (MSIL) felicitated JSW Steel with the Special Support Award at the Maruti Supplier Conference 2024.
Suzuki Motorcycles India Pvt.
Ltd. awarded the JSW BPSL plant the Best Supplier Award for CPS Implementation at their Annual Supplier Conference 2024.
Schaeffler India recognised JSW Steels Longs unit (Salem) in the Value category on Supplier Day 2024.
Toyota Boshoku presented JSW Steel with an Appreciation for Support Award for initiating localisation of AHSS Steel.
Contributing to Indias green energy transition
In the wind power and solar power industries, JSW Steel has emerged as a prominent and favoured supplier. Key components of windmills such as towers, generators, nacelles, gearboxes, blades, and rotor hubs are all manufactured using steel. The wind power industry added 3.25 GW capacity in FY 2023- 24, with JSW HR plates being utilised in 65% of the towers, supporting the installation of 2.07 GW capacity. Our Anjar plate mill produces specialised HR plates for these tubular towers, vital for their structure. In the solar power sector, the industry saw a 15 GW increase in capacity, where our key products like Galvalume (brand Galvos) and Magsure experienced a 93% growth in sales, contributing to the solar infrastructure. JSW Steels innovative materials continue to support and enhance the sustainable energy infrastructure in India.
Enabling automakers to make mobility safer and efficient
JSW Steel collaborates closely with automotive manufacturers to enhance safety, reduce weight, and improve fuel efficiency in vehicles. JSWs Advanced High-Strength Steel (AHSS), known for its exceptional tensile strength and malleability, empowers OEMs to attain superior safety ratings. Key safety components, including those crucial for crash protection, are crafted from AHSS. Additionally, the Company has engineered steel specifically for suspension parts, ensuring high strength and optimal fatigue resistance. In FY 2023-24,
JSW Steel has secured several key grade approvals in the automotive sector. Notable achievements include supplying hot rolled steel for Dolvi-Kalyani Maxion Wheels and Urja Metallics, and providing specialised coated steel for Hyundai and Kia Motors.
4.1 Product performance
JSW Steel has placed a strategic emphasis on enhancing its share of VASP in the overall sales mix and has made significant investments in driving product innovation. The Company achieved its highest ever VASP sales volume, up 19% y-o-y, and increased its share of VASP sales in the overall mix to 61% during FY 2023-24, as compared to 56% in FY 2022-23.
Product mix change
| Product Mix Change % | Consol. | |
| FY23 | FY24 | |
| Semis | 3% | 3% |
| HR | 38% | 38% |
| Cold Rolled | 16% | 16% |
| Galvanised/Tinplate | 14% | 15% |
| Colour Coated | 7% | 7% |
| Longs | 21% | 20% |
| Pipe/Tube | 1% | 1% |
4.1.1 Flats
Flats, comprising Hot Rolled, Cold Rolled, Colour Coated, Galvanised, Galvalume and Avante Steel doors contributed 75% to the top line in FY 2023-24, an 11% growth over the previous year.
Hot Rolled (HR)
1SW Steel is renowned for the top-notch guality and reliability of its hot-rolled products. Employing advanced machinery and manufacturing technigues, Hot Roll coils are produced at Hot Strip Mills located in Vijayanagar, BPSL, and Dolvi. These hot-rolled offerings find applications across various sectors such as structural and general engineering, tubing, piping, and LPG cylinder manufacturing. They serve as vital components in industries spanning Industrial S Engineering, Automotive, Energy, and Capital Goods. In FY 2023-24, hot-rolled products constituted 38% of the Companys overall product portfolio.
Cold Rolled (CR)
The Vijayanagar plant boasts Indias widest cold rolling mill, specialising in the manufacturing of CR closed annealed sheets and coils. These products are widely utilised in automotive, consumer durables, industrial S engineering, and electrical panel industries. Cold Rolled products made up 16% of the total product mix in FY 2023-24.
Cold Rolled Close Annealed (CRCA)
The cold rolled close annealed (CRCA) segment constitutes a significant portion of the total flat product sales. In FY 2023- 24, heightened demand from the PV segment drove CRCA category sales to their highest levels ever. JSW Steel has seized an early advantage by partnering with leading automobile manufacturers to pioneer innovative steel grades.
Among these advancements are HSLA and AHSS, specialised steel grades engineered for enhanced impact resistance and lightweight construction. These novel grades empower auto OEMs to meet consumer preferences for eco-friendly vehicles by incorporating lightweight steel, thereby improving fuel efficiency and contributing to carbon neutrality goals.
Electrical steel
Our range of Electrical Steel products remains instrumental in enhancing the energy efficiency of various electrical eguipment, including motors, pumps, fans, domestic appliances, white goods, power generators, and small transformers. Customised CRNO grades have been developed to meet the specific needs of rapidly expanding sectors such as Two Wheeler EV and Air Conditioner Compressors. Moreover, we have upheld our status as a preferred supplier in the Wind Energy and Railway Traction Motor segments by consistently providing energy-efficient electrical steel solutions.
Coated
Coated steel is an anti-corrosive, value-added material, with galvanised steel accounting for more than half of the demand. Galvalume and colour-coated steel are rapidly growing segments, with applications across multiple industries. There is significant potential for growth as Indias per capita consumption of coated steel stands at approximately 7 kg, compared to 50-60 kg in the US and Europe. Rural consumption is expected to be a key growth driver. Demand for coated steel is projected to grow at a CAGR of about 10% to surpass 11 MTPA by FY 2024-25, which is approximately 1.5 times faster than that of overall steel (about 7%) and domestic GDP growth (7-7.5%).
1SW Coated Steel currently supplies multiple brands with Gl (Vishwas), GL (Silveron), and colour-coated products (Everglow, Colouron+, Pragati+), as well as OEM products (Radiance).
Colour Coated
ISWs colour-coated steel is corrosion-resistant and used in manufacturing value- added products that address construction, warehousing, and roofing reguirements. 1SW colour-coated products hold a strong position in the current market landscape, securing a leading market share of 44%, with overall domestic sales reaching 1.37 MnT. 1SWSCPL is the only company to offer brands across multiple price ladder segments, including Everglow in the super-premium, Colouron in the premium, Pragati in the popular, and the recently launched Indradhanush in the mass market segment. The market for colour-coated products has increased by 12% y-o-y based on ISWs production and products. 1SW Steel has partnered with 1SW Paints to launch new coating variants, including Anti-Dust, Hi-Gloss, and Cool Roof. The Cool Roof paint system is a sustainable product that offers better heat reflectivity to reduce the temperature inside buildings and alleviate the heat load on AC systems. The Anti- Dust variant has been designed for public infrastructure projects to maintain a long-lasting and attractive appearance in challenging environments. The Company is dedicated to maintaining its strong position in the appliance business by providing a range of new colours and coating combinations to its customers. Furthermore, it continues to supply colour-coated products for several prestigious national and international projects.
1SW Steel is expanding its product portfolio in line with the expansion plans of its clients through the Early Vendor Involvement process. It is collaborating with multinational customers to supply materials to their global operations while also developing grades that support the Make in India initiative, boost domestic demand, and aid import substitution. The Company is working closely with its customers to source high-guality materials for their diverse end-use applications and has undertaken specific localisation projects to assist them.
Benefitting from PLI Scheme
1SW Steel has gualified for the PLI scheme for specialty steel. The Company has been approved for six categories. This includes six projects which are already underway at a committed cost of Rs. 5,350 crore.
Galvanised and Galvalume
Galvanised and Galvalume products make up 13% of the total product mix. 1SW Steel is the countrys largest producer of Galvalume products that are preferred for roofing and cladding end uses due to their superior corrosion resistance and heat reflectivity as well as longer lifespan with the same coating weight. As demand for the solar segment continues to surge, new grades are being developed to meet emerging needs and broaden the sectors customer base.
The 1SW Galvos brand is designed to address the typical challenges that solar panel installations face, such as harsh outdoor conditions and being embedded in the ground. Galvos is specially eguipped to withstand challenging alkaline and corrosive environments, in conjunction with an epoxy/PU layer, and has been performing well in this segment. Last year, to address the needs of solar trackers, HSLA grades were developed for making torgue tubes for Indian and export markets, a first in the industry. These HSLA grades have been approved by major global solar players for use in their installations in India and abroad. 1SW Steel is collaborating with global developers to offer these solutions worldwide.
Gl S GL products constituted 41% market share of domestic market and 1SW increased domestic sales by 12% y-o-y. The alloy-coated galvanised and galvalume products are versatile and characterised by high corrosion resistance and heat reflectivity.
> Galvalume has found a lot of popularity in the solar heating panel and HVAC segments due to its light weight and heat reflective properties.
> Magsure S ZAM are other new products added in our offerings in FY 2023-24.
JSW Magsure
This is a galvanised steel made with a Zinc, Magnesium, and Aluminium alloy, providing five times the corrosion resistance of traditional galvanised iron under extreme weather conditions. Manufactured at ISWs Vijayanagar and Vasind Coated plants, Magsure is utilised in a variety of sectors, including solar structures, cooling towers, and water storage, among others. Key attributes of 1SW Magsure include superior corrosion resistance, enhanced workability, high chemical resistance, and environmental friendliness, making it an ideal choice for demanding applications.
Tinplate
Tinplate is a highly sustainable packaging material with endless potential, as it can be recycled indefinitely, making it more environmentally friendly than many other competing materials. It is also one of the most valuable downstream products in the flat steel segment.
Global demand for tinplate is expected to rise as the world looks for sustainable packaging materials. Domestic demand has been steadily improving due to increasing urbanisation, changes in food habits favouring packaged food, and a growing variety of food retail options. ISWs growth in Tinplate as a premium product is 29% year-on-year and is largely replacing imports, with its present market share in the domestic market at 39%.
Tinplate, being a packaging medium, is one of the highest value-adding downstream products in the flat steel segment. 1SW envisages this category growing steadily and has expanded capacities to capture more variants within the prime grades for BIS certified tinplate. Currently, 30-35% of Indias total tinplate demand is met from imports.
4.1.2 Longs
Long products serve as essential components for major infrastructure endeavours, playing vital roles in road construction, metro and rail infrastructure development, bridge construction, and the establishment of power and nuclear plants. JSW Steel achieved sales of 4.9 MnT of long products in FY 2023-24, marking a 5% year-on-year growth.
TMT (OEM)
Crafted from virgin iron ore for unparalleled purity, JSW Steels TMT bars boast exceptional strength and flexibility. Utilising state-of-the-art technology - renowned for producing top-tier HYQST (High Yield Quenched and Self Tempered) bars via the METCS (Morgan Enhanced Temperature Control System) process - ensures superior guality. Its attributes, such as weldability, corrosion resistance, and malleability, render it the preferred choice for consumers.
The emerging demand for TMT in India stems from the Governments focus on infrastructure development initiatives. Long products are indispensable raw materials for a multitude of large-scale projects encompassing road construction, metro and rail infrastructure expansion, bridge building, and power generation, including nuclear plants.
JSW Steel is actively supplying its TMT long products to over 500 ongoing projects spanning various sectors. Among these, road projects constitute more than 20%, and metro rail initiatives approximately 10%, with the remainder distributed across a spectrum of several other projects.
Key infrastructure projects underway
> Metro projects in Mumbai, Navi Mumbai, Pune, Nagpur, Bengaluru, Ahmedabad, Kochi, Kanpur, UP, Surat, and Delhi
> Ahmedabad-Mumbai High-Speed Rail Project
> Mandovi Bridge in Goa, and Nadia Bridge in West Bengal
> Expressways in Mumbai Coasted Road
> Airports - Navi Mumbai and Jewar
> Nuclear projects underway in Tarapur (Maharashtra), Rawatbhata (Rajasthan), and Kumbakonam, Kalpakkam, and Tirunelveli (Tamil Nadu)
Wire Rods
Produced with cutting-edge technology to ensure superior guality, wire rods are engineered to fulfil diverse application needs. Fabricated at facilities in Vijayanagar, Salem and BPSL, wire rods constitute 5% of the Companys product spectrum.
They serve various industries, including automotive, general engineering, spring applications, welding, machining, and bearings.
The surge in demand for wire rods parallels the growth of Indias automotive and industrial manufacturing sectors.
Low Relaxation Prestressed Concrete Steel Strands
JSW Steel has introduced a groundbreaking product for the construction industry, the LRPC - Low Relaxation Prestressed Concrete Steel Strands, from its Vijayanagar -
Neotrex plant with a capacity of 144 Kt per annum. LRPC structures reduce project costs through decreased concrete and labour time, enabling longer spans, sleeker structures, increased safety, and more usable space. This product has guickly gained traction, achieving 40% of plant capacity utilisation in its first year,
28% market share by Q4 FY 2024, and securing involvement in major projects like the Mumbai-Ahmedabad Bullet Train and NHAI road projects across India.
Alloy Steel
JSW Special Alloy Steel is manufactured at Salem Works, which stands as Indias largest primary integrated special alloy steel plant. Sales of alloy longs surged by 11% in FY 2023-24, constituting 4% of the product mix. Further, new grades have been formulated to cater to diverse applications spanning automotive, textile machinery, general engineering, and more.
Throughout the year, the Salem plant secured nine product approvals across various sectors, including automotive, oil S gas, bearings, mining, wind energy, and general engineering. Salems strategic location offers a competitive edge, benefiting from lower transportation expenses and expedited deliveries facilitated by its well-connected network of highways and stockyards across India. Furthermore, Boron Wire Rod grades have been successfully developed and commercialised at the Vijayanagar plant, thereby enriching the product portfolio. With the Governments PLI scheme is geared toward promoting domestic production of specialty steel items, JSW anticipates heightened product development and accelerated prototyping in this segment, as applications are currently being accepted.
4.2 Branding initiatives
JSW Shoppe is a unique franchise model that serves as a cornerstone of our retail strategy, functioning as an exclusive outlet model that provides customers direct access to the Companys comprehensive range of products. This enhances customer experience by ensuring product availability, guality assurance, and brand consistency across all touchpoints.
Brand recall
JSW Steel has effectively utilised branding initiatives to embed a strong brand recall among its target audiences. By employing branding strategies that align with community values and customer needs, it has established a significant and positive presence in the minds of consumers. For instance, regional campaigns during local festivals have reinforced brand recognition and affinity, connecting culturally and emotionally with customers.
Key ad campaigns in FY 2023-24
During FY 2023-24, JSW Steel launched several high-impact advertising campaigns. Notable among them were the #RoofToDream campaign and the targeted regional campaigns during Pongal and Onam that achieved commendable reach and impressions across digital platforms. These campaigns were carefully designed to resonate with specific demographics, leveraging cultural nuances to enhance engagement and brand connection.
Integrated Media Approach
JSW Steels integrated media strategy involves a mix of traditional and digital channels to maximise reach and engagement. It includes television, print, outdoor, and online platforms, ensuring comprehensive coverage that spans diverse consumer segments. This sophisticated media mix has allowed the Company to maintain a consistent brand message, increase customer touchpoints, and drive more effective market penetration.
Solar module mounting structure (Magsure-Coated)
Designed for the renewable energy sector, offering enhanced durability and resistance for long-term solar installations.
Long Members for CVs
Hot-rolled steel for structural components in commercial vehicles, ensuring optimum strength S weldability.
Oil S gas valves (Long 8 Special Alloy)
Alloy steel for manufacturing valves in the oil and gas industry, ensuring superior strength and corrosion resistance.
The JSW Experience Centre
JSW Steel introduced The JSW Experience Centre, a digitally advanced facility designed to showcase its array of products and services. This state-of-the-art centre features the JSW Legacy Wall, which illustrates the Companys evolution and influence in the steel industry. The Product Wall offers an interactive display of JSW Steels diverse products, while the Digital Portal includes kiosks for exploring products and downloading brochures via QR codes. The centre embodies JSWs core values-Courage, Agility, Collaboration, Compassion, and Commitment-enhancing brand engagement and facilitating informed purchasing decisions.
Reinforcement and crash parts for PVs
Cold-rolled steel for automotive structural and crash parts, providing excellent combination of strength and formability.
Ammunition shell casing for artillery guns
Special alloy steel for ammunition shell casings, meeting stringent defence specifications with high resistance to impact and stress.
Customer engagement
JSW Steel engages customers by highlighting the distinct advantages of its products through targeted marketing campaigns and interactive retail experiences.
JSW Colouron+Roofing
Highlighted during local festivals with campaigns that connected product features with regional cultural traits.
Promoted through the Roof to Dream initiative, showcasing its utility in school roofing projects across India.
JSW Neosteel
Featured in campaigns highlighting its customised solutions, with a focus on the fast construction benefits it offers, particularly targeting urban markets like Mumbai, Pune, and Bengaluru.
JSW Avante Steel Doors
Displayed at industry expos and supported by a unigue marketing collateral, which helped position the product among builders, architects, and interior designers.
Operational
Overview
5.1 Vijayanagar Works
JSW Vijayanagar Works, situated in Karnataka, is Indias largest single-location integrated steel-producing facility with a 12.5 MTPA capacity. What started as a small plant 25 years back is today an epitome of state-of-the-art technology and operational excellence in steelmaking and exemplifies 1SW Steels commitment to innovation and sustainability.
Competitive strengths
> Indias largest beneficiation plant with a capacity of 20 MTPA, eguipped with state-of-the-art facilities for treating low and medium-grade iron ores, increasing the processing of low-grade iron ores to feed agglomeration units.
> Pipe conveyor system with 20 MTPA capacity to transport iron ore to the plant from the mines, an environment-friendly logistics solution and results in cost savings by way of reduction in transportation costs.
> Indias largest Pellet Plant (PP#3) with a capacity of 8 MTPA, using low-pressure gas for pellet induration.
> Captive power generation capacity of 865 MW to cater to the power reguirements of the unit; and 225 MW solar power plant commissioned in FY 2022-23.
> The best available technology for Maximised Emission Reduction of Sintering (MEROS) at the Sinter Plant deployed to reduce stack emissions in compliance with Pollution Control Board norms.
> High-guality coke production through stamp charged coke ovens with a dry guenching system, producing coke with lower moisture resulting in fuel efficiencies.
> 100% process waste utilisation through micro-pelletisation, mill scale briguetting, tailing beneficiation, iron recovery from process waste (dust and sludge), LF slag briguetting, DRI fines briguetting, and slag-to-sand making.
> Unigue technologies for clean steelmaking, including KR facility for deep desulfurisation, sub-lance system, auto-mould width change during casting, mould/strand EMS for slab caster, and Twin RH degasser.
> Houses Indias largest auto-grade steel facility with a capacity of 2.3 MTPA and production capability for the widest range of automotive steels and electrical steels.
> Focused on import substitution and first-time implementation of Best Available Technology (BAT).
Digitalisation
> Video analytics: Implemented video analytics solutions with specific algorithms for detecting water colour and gas emissions.
Enhanced monitoring: Improved precision and efficiency in monitoring and operational visibility during the metal sheet cutting process.
Real-time visual observation: Utilised micro drones for real-time visual observation and maintenance of work records with safety SOPs management.
Thermal imaging: Thermal imaging-based flare stack monitoring, alongside the use of thermal imaging cameras for slag skimming.
> Robotics: Utilised robots in labelling CGL and zinc dross removal.
> Management systems: Introduced visual SOP management systems for critical jobs using smart QR code systems.
> Sensor integration: Screen monitoring with wireless vibration sensors and tuyere platform monitoring with analytics.
> 3D radar: Installed 3D radar for automatic bunker level detection.
Condition-based monitoring: Implemented Condition-Based Monitoring (CBM) in rotating eguipment, like PLTCM/CPL2.
> Slag detection: Deployed a slag detection system to prevent slag carryover. LOERAN wireless sensors: Integrated Long Range Wide Area Network (LOERAN)- based wireless belt sway sensors for the Flexowell conveyor in DRI.
Mill pacing model: Increased HSM#2 productivity through the mill pacing model.
> Online aqua sensors: Used online agua sensors for water ingress monitoring. Robotic sticker pasting: Implemented robotic sticker pasting in CGL-2S3.
Environmental initiatives
> Installed two batteries in Coke Oven-3 and 4 using the SOPRECO technology.
> Commissioned a new dedusting system with a capacity of 1,60,000 m7h in Blast Furnace-1 Sinter Fines (SF) building.
> Installed source-mounted dedusting system in Sinter Fines Conveyor in Sinter Plant-1.
> Installed source-mounted dedusting units at RMHS.
> Developed an in-house dust suppression system at RMHS.
> Developed a solid waste digital dashboard for effective tracking of non-hazardous/hazardous waste.
> Conducted drone-based air guality mapping for stockyards.
> Implemented Al cameras for monitoring fugitive emissions.
Health and safety initiatives
> Achieved an incident-free record in Utilities and Main Step Down Station (MSDS) operations, with 8.26 million man hours and 3,286 days without incidents.
> First-time use of AR/VR for safety training within the 1SW Group.
> Deployed a smart Al-based vision intelligence system for Personal Protective Eguipments (PPE) violation detection.
> Implemented GPS-based smart wearables with human tracking and fall detection.
> Introduced of remote operation for stacker cum reclaimer and base mix barrel reclaimer.
> Around 8,000 1SW and associate employees received training on fire prevention and the operation of fire extinguishers, with additional training provided to safety related personnel.
> An emergency app, 1SW Sahaayata, was developed and made available on Google Play Store.
Capacity expansion
> JSW Vijayanagar Metallics Ltd. (JVML), a wholly-owned subsidiary, successfully commissioned its 5 MTPA Hot Strip Mill at Vijayanagar and made its first dispatch
> Installing new Coke Oven No.5 with a 3 MTPA capacity to cater to the capacity expansion planned at Vijayanagar, and commissioned Battery-B of Coke Oven-5 with capacity of 0.75 MTPA
> Enhancing capacity of the Ore Beneficiation Plant-1 Phase-la with Filters, Thickeners & Conveyors.
5.2 Dolvi Works
JSW Dolvi Works is a 10 MTPA integrated steel plant located on the west coast of India. Acquired by 1SW Steel in 2010, the plants capacity was increased from 3.3 MTPA to 10 MTPA currently through brownfield expansions. Dolvi Works primarily focuses on flat steel production, with an 8.5 MTPA capacity for flat products and the rest 1.5 MTPA for long products. It is the first plant in India to use the Conarc technology for steelmaking and compact strip production, as well as implement a dry Gas Cleaning Plant (GCP) and Energy Recovery System (ERS) in SMS.
Competitive strengths
> Benefits from its strategic location near the coastline, which facilitates efficient logistics and supply chain management. This is further enhanced by the mechanisation at 1SW laigarh Port Limited, allowing significant raw material handling capacity, reducing reliance on road transport, and easing the load on Mumbai Port Trust cargo handling.
> 175 MW Waste Heat Recovery Boilers (WHRB) and a 60 MW captive power plant to harness flue gases and steam from CDQ. These power plants cater to the power requirements of the Phase II 5 MTPA capacity. These power plants operate through the waste gases and the heat generated from operations, making it an environmentally friendly and cost-efficient source.
> Upgradation initiatives, such as the conversion of the 220 KV Air Insulated Substation to a Gas Insulated Substation, enhancing reliability and sustainability. This transition ensures a longer lifespan and better capacity enhancement, supporting future projects and operational stability.
> Implementation of advanced storage and retrieval systems (ASRS) in the new central store project, automation, and artificial intelligence integration for inventory management to enhance efficiency and minimise human errors.
> Manufactures diverse products catering to several industries, including automotive, infrastructure, construction, machinery, LPG cylinder manufacturers, cold rollers, the oil and gas sectors and consumer durables.
<(> Capacity expansion
The Board of Directors has approved the capital expenditure to increase steelmaking capacity by 5 MTPA as part of the Phase- 111 expansion project, taking the total capacity to 15 MTPA.
The project includes state-of-the-art facilities such as a new 5 MTPA Blast Furnace, Steel Melt Shop, Hybrid Continuous Strip Mill that can produce plates and coils, 175 MW power plant based on utilisation of blast furnace gas and lime and dolomite plants.
Implementation of cutting-edge digital solutions including Advanced Process Control (APC), Artificial Intelligence (Al), Internet of Things (loT) and digital twins, positioning JSW Dolvi as a leader in digital maturity
Received multiple national and international safety awards, including recognition from the British Safety Council and FICCI for excellence in safety systems
Utilisation of steel slag for road construction - recycling and sustainable use of byproducts
Digitalisation
Advanced Process Control (APC): Installation of APC in Pellet Plant Balling Disc and other areas to optimise process parameters, enhance productivity, and ensure consistent quality.
Digital logistics management system: The SAMPARK project aims at streamlining logistics through digital platforms, improving coordination and reducing delays in material handling and transportation.
Predictive maintenance and quality: Leveraging machine learning, Al, loT, and digital twins for predictive maintenance, ensuring high equipment reliability and quality control. Various platforms are used for advanced data analytics and predictive insights.
Robotics and automation: Significant investments in robotics and automation have positioned JSW Dolvi as a leader in digital maturity.
Environmental initiatives
> Commissioned the Phase-1 Effluent Treatment Plant with a high recovery rate for treating effluent water, reducing specific freshwater consumption and promoting water reuse in processes such as slag cooling and firefighting.
> Implementation of the Waste Gas Filtration S Recirculation Project at Sinter Plant-2.
> Installation of MEROS (Maximised Emission Reduction of Sintering) to minimise particulate matter and sulphur dioxide emissions .
> Utilisation of steel slag for road construction, demonstrated by the project on NH-66 Mumbai-Goa National Highway, which promotes recycling and sustainable use of byproducts.
Health and safety initiatives
> Regular safety audits, including GEMBA Walks, Leaders audits, and Contractors Field Safety Audits, to identify and mitigate safety risks.
> Comprehensive safety training programmes and skill assessments including Scaffolding Safety Inspector Certification and the strengthening of gas safety measures.
> Implementation of a robust Personal Safety Action Plan and traffic safety measures for road and rail operations within the plant to prevent accidents and ensure safe movement.
FY 2024-25
Priorities
Commence Phase 3 expansion project to increase steelmaking capacity by 5 MTPA to 15MTPA.
Complete the construction of a space frame shed over the ore and flux yard to prevent material losses due to moisture and enhance operational safety during monsoon.
Finalise the setting up of the new central store eguipped with an Automated Storage and Retrieval System (ASRS).
100% use of plant generated dust - secondary material specific consumption at Sinter and Pellet
Reduction in handling loss during iron ore movement.
5.3 Salem Works
JSW Steels Salem Works is Indias largest specialty steel plant, with a production capacity of 1 MTPA. It is one of the countrys largest plants for special alloy steel long products, catering to diverse industries with its advanced production capabilities.
Competitive strengths
> Raw material availability ensured by its location in South Indias mineral belt.
> Well-supported by efficient rail and road logistics.
> Caters to auto manufacturing units located in the southern and western regions of the country.
> Manufactures up to 850 special grades and supplies to all major Indian Automotive Original Eguipment Manufacturers (OEMs).
> Market leader in special grade steels for bearings, cold heading guality wires, and forging segments.
FY 2023-24 highlights
Zero Lost Time injury (LTI).
Collaborated with BITS Pilani on upskilling employees on SMART Manufacturing concepts with a tailor-made mentorship programme.
Highest-ever captive power generation.
Lowest cobble in BRM, a benchmark for Indian high-speed mills.
Implemented a Centralised Digital Emergency Management system to improve emergency handling process.
Installed mobile type dedusting in Coke Oven Pusher Car to control the visible emission and fugitive emission.
Launched digitalised skill assessment platform for contractual workforce in September 2023.
LEAP (Learn, Engage, Accelerate and Progress) programme for Diploma Apprentice Trainees conducted.
Achievements in FY 2023-24
> Won the IIM National Sustainability Award in the alloy steel category.
> Won theGolden Peacock Award for Occupational Health S Safety by the Institute of Directors.
> Received the Best Innovative technology for recycling award organised by CM - SR Industrial water waste management competition.
> Clinched theGold Awardin the 5th ICC National OHS Awards 2023 for excellence in the sphere of Occupational Health S Safety.
> Received the Platinum Award at the 13th Exceed OHS Award S Conference 2022 in the Steel category.
> Recognised with the Platinum Award for ECO innovative product by Grow Care India.
> Recognised with the Gold Award for Excellence in Energy Efficiency by Grow Care India.
> Recognised withGold Awardfor Excellence in Water Management by Grow Care India.
> 16 teams participated and won 16 Gold (first category) awards in Chapter Convention on Quality Concepts (CCQC) by the QCFI Coimbatore chapter.
> Won 8 Par Excellence (first category) awards in the National Convention on Quality Concepts (NCQC) by QCFI at Nagpur.
> 3 teams participated and won 3 Gold (first category) awards in the International Convention on Quality Control Circles (ICQCC) in China.
> CFT project of MRSS S Safety Improving the safety in circuit breaker operation won the Gold award in the Cll Winners competition.
> Safety, IT (cross-functional team) and RSD team participated in the Idea Arabia International Award competition conducted by Dubai Quality Group and secured the first place in respective categories.
Environmental initiatives
> Optimised burden distribution based on raw material charging inside the furnace, resulting in a fuel rate reduction.
> Installed a red brick protection layer on the oven top in Battery-1, reducing radiation losses from the oven top and lowering energy consumption.
> Optimised anthracite coal consumption in the Sinter Plant by introducing a screen in the fuel route and augmenting the capacity of the flux hammer mill leading to energy savings.
> Blast furnace fuel reduction through external screening of iron ore lump, decreasing fines input to the furnace, with a fuel rate reduction.
> Developed a hot metal silicon prediction model to reduce the fuel rate at blast furnace.
Projects commissioned in FY 2023 24
Final Electro Magnetic Stirrer (FEMS): Reduces centre porosity and improves the homogeneity of liguid steel composition.
Automatic mould powder feeding system in CCM3: To ensure precise and consistent mould powder feeding, improving the guality and consistency of the cast products.
Online wire rod coil weighment system: To enhance accuracy and efficiency in the wire rod coil weighing process, ensuring better guality control and process management.
5.4 Raigarh Works
JSW Steel Raigarh Works is an integrated steel production facility, with a crude steel capacity of 0.95 MTPA. It is known for its excellence in manufacturing special alloy steel long and flat products.
Competitive strengths
> Availability of raw material and resources is sufficiently ensured by its location in Chhattisgarh-Odisha coal and iron mining belts.
> The plant is well supported by efficient rail and road logistics.
> This unit facilitates the manufacturing of special grade long and flat steel cast products, high grade sponge iron, iron pellets S TMT bars.
> The long products have their application in the manufacturing of rails, seamless pipes, wire rods, and special grade forging components like flanges.
> The plant produces up to 157 special steel grades; 350 mm size round is manufactured only in this unit.
FY 2023-24 highlights
Achieved 5 million+ safe man hours
Highest ever monthly production achieved in March 2024 for Blast Furnace, DRI and SMS Units71 Surveillance cameras installed throughout plant premises for safety enhancement
Installation of 75 numbers of Vertical Life Line on Monkey Ladders
Blast furnace top equipment (Bank of valves and BLT gear box) replaced for the first time, enhancing furnace performance and reliability
Achievements in FY 2023-24
> CM HSE awards for Zero Fatality S 70% Reduction in Accidents from FY 22-23 organised by Cll Kolkata (22.01.2024) S Oil Raipur (26.03.2024)
> 1st prize in EHS Innovation Award for Zero Fatality S 70% Reduction in Accidents from FY 22-23 organised by Green Tech, Delhi (24.11.2023)
> Winner in 2nd CEE National Environment Excellence Award for Best Practices and New Initiatives in Environment and Most Sustainable - Fly Ash Utilisation organised by CEE (Centre of Enviro Excellence) (07.06.2023)
> Winner in National Power Plant Awards 2023 for Best Practices and New Initiatives - Best Performing CPP unit (below 50 MW) organised by CEE
> Winner in 2nd National Power Gen Water Awards 2024 for Best National Ash Handling Plant of the Year - Private sector organised by CEE (07.03.2024)
> Winner in 3rd CEE National Energy Efficiency Awards 2023 for Best Energy Efficient Unit - CPP Coal below 50 MW organised by CEE (01.12.2023).
Project commissioned in FY 2023-24
Online DRI feeding conveyor from DRI to SMS: Reduction in feeding time of DRI Waste heat recovery system in sinter plant: to reuse heat in sinter machine through WHRS
Flow jam switch in BF PCI line in BF: so that any jam can be detected instantly, automatically the process is stopped, and the concerned lances are cleared.
> Ladle Reheating Furnace #1 was re-commissioned in SMS.
Wet scrapper Installation in DRI WHRBs: resulting into lower dust emissions and better waste management.
Commissioning of truck tippler #2 in RMHS: all trucks now unload without poclain.
Environment Initiatives
> Drop chute was made in EOT crane for easy disposal of dust from EOT Crane platform (SMS)
> Water fog system for all conveyors S junction Houses
> Water sprinkler on roadside (covering 6150 m)
> ESP revamping done in DRI to improve effectiveness
> 5000 trees were planted in the plant premises.
5.5 Bhushan Power a Steel Ltd. (BPSL)
BPSL, acquired by JSW Steel through the Insolvency and Bankruptcy Code, 2016 (IBC) in March 2021 located at Sambalpur, Odisha, is an integrated steel producer with 3.5 MTPA capacity at present, which is being expanded to 5 MTPA. It also has downstream capacity of 1.8 MTPA at Sambalpur, Kolkata and Chandigarh. BPSL is one of the largest alloy steel producers in India with a 1.2 MTPA capacity.
Competitive strengths
> Indias first TPG-accredited Heat Treatment Process for Long Products.
> Indias highest product licence (BIS) holder with 32 operative licences and 7 at application stage.
) Only CPP in India to have high energy drain valves (zero leakage valves) for better efficiency.
) Indias first CPP that runs in full auto mode with all units fully interconnected.
) Indias first multi-fuel fired CFBC boiler with capacity of 250 TPH ) Indias largest tube mill complex in a single location with capacity of 0.5 MTPA.
) Indias largest bright bar producer with a capacity of 0.1 MTPA at a single location, with three Roll Technology.
) Indias first plant with the capability to produce hexagonal bars in the 18.5-60 mm size range, in any size decimal.
) Indias first plant with the biggest and widest range of sizes from 5.5 mm to 60 mm in wire rod.
) CSP has the capacity to produce thinner sheet coils up to 1.2 mm thickness.
) Blast Furnace-2 is the second plant in India to have dynamic PCI distribution system.
Capacity expansion from 3.5 to 5 MTPA is progressing well
EAF Modification pertaining to heat capacity completed.
Commissioned ZPF, LF, VD, Caster at SMS 2.
Commissioned WRM 2 of 0.6 MTPA.
Strategic enhancements to increase hot metal production in blast furnaces, including additional PCI grinding, drying unit and dynamic flow control valves.
Commissioned VPA-9: installed an additional unit to increase dry filter cake production capacity.
Digitalisation
> Implemented Tube Mill online Status Monitoring System.
> ISO Cell - IMS portal launched for Documents control.
> Digitisation of energy monitoring at Blast Furnace-1 and 2
> LASER-based non-contact type CO and 02 gas analyser for hot stoves, PCI mill inlet/outlet and PCSB.
> Energy Optimisation and Furnace Scheduling for SMS 1
Projects in progress:
> WRM - Digitisation of energy monitoring
> WRM - Rolling Line bar temperature detector upgradation with digital display
> Tube Mill - Digitisation of energy monitoring.
> RFID tags for tracking and positioning of Torpedo Ladle Cars in Blast Furnace-1 and Blast Furnace-2 Cast House Tracks (8 nos.).
> Iron Zone (Blast Furnace 1/2,
Sinter 1/2, Pellet, Tube Mill and Beneficiation) - Data historian and dashboard for iron zone.
> Video analytics for PPE compliance and Geofencing.
Environmental initiatives
1.1 Water:
> CRM ETP of capacity 50m3/hour commissioned.
> Coke Oven-2 oven top AP cap water recycle project to save fresh water.
> Coke Oven -1 wet guenching water type changed. Fresh water is replaced by cooling tower treated blowdown of wastewater treatment plant.
> Pipeline network increase for blowdown treated water use of WWTP in dust suppression and horticulture use.
1.2 Air
> Wagon tippler dry fog system commissioned in all wagon tipplers of RMHS.
> 12 truck tipplers high pressure water spray system commissioned.
> 140 new rubbish chutes installed in conveyor junction houses to reduce fugitive dust emission.
> 250 water sprinklers installed in road, open space and yard to reduce fugitive dust.
> 3 new bag houses under commissioning in Coke Oven-2 to reduce fugitive dust; the rest 4 bag houses are in erection phase.
1.3 Waste:
> Trial of the Blast Furnace flue dust of 350 tonnes conducted.
1.4 C02 Emission/Energy conservation
> Coal dryer for DRI.
> 120 steam trap installed.
> Coke Oven-1 WHRB steam generation increased.
> Additional air blower installation in each DRI to increase steam generation.
1.5 Measurement and Monitoring
> New Environment Management Laboratory commissioned.
> New fifth continuous ambient air guality monitoring station commissioned.
Health and safety initiatives
> Additional Advanced Life support ambulance procured in case of multiple medical and surgical emergencies.
> Specialist clinics in the discipline of OSG, Pediatrics, Eye and Physiotherapy started in township.
> Skill assessment of all contract employees completed.
> DSS (formerly Dupont) engaged for BBS and Safety Leadership training; 1,593 employees trained.
> All Hydra replaced by the new generation Farana.
> All vertical ladders fitted with C cage.
> Speed monitoring cameras installed at strategic locations.
> Night illumination jackets provided to each employee for better visibility at night.
> Two wheelers restricted and buses engaged for smooth movement inside the plant.
> Railway track fenced, from the Blast Furnace to Steel Melting Shop.
> 9,000 RCCB/RCBO installed throughout the plant.
> 13,000 rubber mats near electrical panels installed throughout the plant.
> 900 industrial welding sockets installed throughout the plant.
> 164 lightening arrestors installed in all chimneys, buildings, etc.
FY 2024-25
Priorities
LCP 5 Commissioning
1,000 TPD Oxygen Plant commissioning
EAF& FED (HMDS) modification
Track Hopper commissioning along with capacity augmentation of Rail and Locomotive
WRM 1 upgradation and furnace capacity enhancement
Capacity augmentation of RMHS
Upgradation electrical system, utility system to cater to 5 MTPA expansion
BF Slag conveyor and DRI conveying to SMS 1 and 2
Complete lubrication management programme
5.6 JSW Steel Coated Products Limited (JSWSCPL)
JSWSCPL is Indias largest manufacturer and exporter of Coated Steel products with a total capacity of 5.3 MTPA and colour coated capacity of 2.4 MTPA. It has pan-India presence with 8 plants including one coming up at Jammu S Kashmir. The products manufactured include Galvanised, Galvalume, CRCA, Colour Coated Products and Tin Mill products.
JSWSCPL has been a leader in product innovation, launching 7 brands across premium and other segments to cater to different customer segments. Branded sales constituted around 30% of total sales. JSWSCPL aspires to be the leading global downstream consumer-centric steel brand. It is the largest player with over 30% domestic market share.
Competitive strengths
> World-class manufacturing facilities at 8 locations across India
> 12,000+ retailers, 240+ distributors, presence with deeper rural penetration.
> Channel enablement and faster distribution - faster servicing and wide reach.
> Best-in-class customer experience: Shoppe connects and Experience Centres.
> Influencer ecosystem: guality service via loyal fabricator network, only player to offer structured training programmes and engagement.
<$- Capacity expansion
0.25 MTPA new Colour Coated Line at Rajpura in Punjab commissioned in June 2023.
Colour Coated Line of 0.12 MTPA in Jammu & Kashmir expected to start commissioning activities in 02 FY 2024-25.
Provided safety cameras for fork lift reversing safety with red light flash on three sides.
Seat belt lock and biometry for fork lift operator safety and to avoid misuse of fork lift by others
Face Recognition System (FRS) provided for all the associates, attendance recording and discipline
Environmental initiatives
> All the locations accredited with EMS ISO 14001:2015 and 45001: 2018 (OHSAS) Certification and also certified for IS0-50001-2018 Energy Managements systems.
> The industrial effluent and hazardous waste treatment units provided, operated and maintained are ETP-ZLD, ARP.
> For collection and treatment of domestic wastewater, the Sewage Treatment Plants are provided and well maintained.
> Treated industrial effluents are reused for manufacturing processes and cooling purpose. Treated STP water is used for process as well as gardening.
> All the pollution control units are operated and maintained. Due to the usage of clean fuel, i.e., natural gas, air emissions are also within prescribed limits.
> All the plants participated in the National Water Neutrality and gualified as Aspiring Water Neutrality units, organised by Cll-Triveni New Delhi.
Health and safety initiatives
> Leadership Safety Walk by HODs to create more awareness
> Started Occupational Safety and Health guarterly awards competition among Coated Plants.
> Safety Monthly Theme implementations started with involvement of Shop Floor employees and associates.
> Quarterly Top Management Online Connect started with EHS improvements, way forward and commitment towards achieving Zero Harm by 2030.
> Emergency mock drill exercise started on a monthly basis
> Female workforce involvement started in all EHS activities and EHS committees.
> Road Safety, vehicle surveys and traffic safety initiatives started including training on defensive driving.
Financial
Performance
6.1 Standalone
The global economy performed well despite the headwinds of elevated interest rates and adverse geopolitical events. The economic activity was resilient due to growth in employment and incomes held steady supporting demand, including greater Government spending and household consumption. According to the IMF, global GDP growth for 2023 is estimated at 3.2%. Inflationary pressure is easing across major economies albeit with some speedbumps. This is likely to allow central banks to commence rate cuts in 2024, although the extent of cuts has been diluted comparec to earlier forecasts.
Geopolitical risks have risen, and need to be watched, especially for their impact on global trade and energy prices. Indias economic growth momentum continues, drivei by the industrial sector and robust capital formation. Steel demand grew 13.6% in FY 2023-24. Strong government spends on infrastructure and an anticipated private capex recovery are contributing to the momentum. An expected rural recovery, aidec by above-normal monsoons during 2024, provides further tailwinds to economic growth. Indias overall macroeconomic profile remained strong during the year, buoyed by healthy forex reserves and positive capital inflows, despite escalating geopolitical risks.
Financial Performance (Standalone)
| FY 2023-24 | FY 2022-23 | Growth (%) | |
| Revenue from operations | 135,180 | 131,687 | 3% |
| Other income | 1,704 | 1,572 | 8% |
| Operating EBITDA | 21,980 | 15,371 | 43% |
| EBITDA margin (%) | 18.28% | 11.67% | 39% |
| Depreciation and amortisation expense | 5,435 | 4,952 | 10% |
| Finance costs | 6,108 | 5,023 | 22% |
| Profit before exceptional items | 12,141 | 6,968 | 74% |
| Exceptional items | 39 | - | NA |
| Tax expense/(Credit) | 4,061 | 2,031 | 100% |
| PAT | 8,041 | 4,937 | 63% |
| Earnings per share (diluted) (Rs. ) | 33.01 | 20.42 | 62% |
6.1.1 Production and sales
In FY 2023-24, JSW Steel reported its highest ever crude steel production at 22.26 MnT* with an average capacity utilisation level of 92%, vs. 91% in FY 2022-23.Crude steel production increased by 7% y-o-y primarily due to the ramp-up of the Dolvi Phase II expansion of 5 MTPA, which was commissioned in FY 2021-22, and additional production volumes from Raigarh unit pursuant to merger of 1SW Ispat Special Products Limited (1ISPL) from July 31, 2023.
During FY 2023-24,1SW Steel reported its highest ever steel sales volume at 21.22 MnT, which grew by 8% y-o-y.
The Company exported 2.25 MnT of steel, up 27% y-o-y and accounted for 11% of the total sales, as against 9% in FY 2022- 23. Domestic sales stood at 18.97 MnT, an increase of 6% y-o-y. The domestic steel demand grew by 14% y-o-y to 136.25 MnT primarily due to the Governments thrust on infrastructure, housing construction, the increasing share of manufacturing in GDP, and increased demand from the auto sector. Sales of Value Added and Special Products (VASP) accounted for 61% of the total sales volume for the year. The Companys branded products sales stood at 41% of the total retail sales, up from 39% in FY 2022-23.
*The merger of the Joint Venture, Creixent Special Steels Limited along with its subsidiary JSW Ispat Special Products Limited (JISPL) with the Company became effective on July 31, 2023. The production volumes have not been restated for the earlier periods.
6.1.2 Revenue and EBITDA
Revenue from operations grew 3% y-o-y to Rs. 135,180 crore, primarily due to an increase in volumes, which grew by 8% partly offset by lower sales realisations, down 5% y-o-y on account of the decline in steel prices attributed to lower international steel prices and increased imports at predatory pricing. The Company registered better operating margins in the first three guarters of FY 2023-24 as against FY 2022-23 primarily due to a reduction in costs, mainly on account of cost of coal consumed and power and fuel costs. However, the Q4 margins were impacted by lower realisations and higher coking coal cost that peaked towards Q3 FY 2024.
The realisation during FY 2023-24 remained fairly stable but lower compared to FY 2022-23.
Overall despatches from the Karnataka and Odisha captive mines to the plant locations constituted 41% of iron ore reguirements of the Company in FY 2023-24, which was also 41% during FY 2022-23. The unprecedented increase in international coking coal prices and iron ore prices in the second half of the previous financial year and other raw material prices due to geopolitical issues had resulted in increase in total cost in FY 2022-23.
The Company achieved an annual Operating EBITDA of Rs. 21,980 crore, an increase of 43% y-o-y, with an EBITDA margin of 16.3%. EBITDA per tonne was at Rs. 10,357 during FY 2023-24, higher by 33% y-o-y primarily on account of lower coking coal prices, which were elevated in the previous year, lower power and fuel costs partially offset by decline in sales realisations and higher iron ore prices. The domestic iron ore prices were higher due to elevated international iron ore prices leading to
increase in exports of iron ore /pellets, resulting in pressure on domestic supply.
Revenue analysis (Rs. in crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Domestic Turnover | 118,037 | 118,568 | -531 | 0% |
| Export Turnover | 15,572 | 11,471 | 4,101 | 36% |
| Total Turnover | 133,509 | 130,039 | 3,570 | 3% |
| Other Operating Revenues | 1,571 | 1,648 | -77 | -5% |
| Total operating revenue | 135,180 | 131,587 | 3,493 | 3% |
India was a net steel importer during FY 2023-24 with elevated imports (up 37% y-o-y), especially from China; this remains a challenge for the domestic steel industry. However, domestic steel demand remained healthy, driven by growth in overall consumption and the Governments spend in the infrastructure sector.
Domestic turnover remained flat in FY 2023-24 as against FY 2022-23, though there was an increase in volume by 6% which was offset by 7% lower realisations. The domestic sales volume increase was primarily due to better domestic demand driven by the Governments infrastructure spending. Export turnover increased 36% y-o-y to Rs. 15,572 crore from Rs. 11,471 crore in FY 2022-23, on account of a 27% increase in export volumes offset by lower export realisations which declined by 10%. The export volumes were lower in FY 2022-23 due to imposition of export duty on steel from May 2022 to November 2022.
6.1.3 Other Operating Income
Overall other operating revenue was Rs. 1,571 crore in FY 2023-24 as compared to Rs. 1,648 crore in FY 2022-23. Other operating income was lower by Rs. 77 crore, largely due to a lower export incentive income as the Company exported under the Advance Authorisation Scheme as against availing duty drawback income in the previous year and decrease in Government grant income due to lower realisations. Flowever, this decrease in other operating income was partially offset by higher Export Promotion Capital Goods (EPCG) grant income and job work income.
6.1.4 Other Income (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) 1 | |
| Other Income | 1,704 | 1,572 | 132 | 8% |
Other income was higher by Rs. 132 crore mainly due to the receipt of NCD redemption premium on investments made in Piombino Steel Limited, a subsidiary of the Company, increase in interest income was due to higher cash and bank balances, which was partly offset by a lower dividend income from group companies and lower interest income from loans extended to subsidiaries.
6.1.5 Materials (Rs. in crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Cost of materials consumed | 70,964 | 75,694 | -4,730 | -6% |
| Mining premium and royalties | 10,011 | 7,457 | 2,554 | 34% |
| Total Materials | 80,975 | 83,151 | -2,176 | -3% |
Expenditure on material consumption decreased 6% y-o-y to Rs. 70,964 crore primarily on account of a 22% decrease in coking coal prices in FY 2023-24, as the coking coal prices were higher due to supply chain disruptions and the Russia-Ukraine conflict in FY 2022-23. This decrease on raw material cost was partially offset by an increase in iron ore cost and increased consumption of raw materials due to increase in production volumes by 7%.
Mining premium and royalties cost increased by 34% in FY 2023- 24 to Rs. 10,011 crore from Rs. 7,457 crore in FY 2022-23, on account of increase in iron ore IBM prices conseguent to elevated international iron ore prices leading to increase in exports of iron ore /pellets, resulting in pressure on domestic supply.
6.1.6 Employee Benefits Expenses (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Employees Remuneration and Benefits | 2,357 | 1,975 | 382 | 19% |
Employee benefits expenses were higher by Rs. 382 crore at
Rs. 2,357 crore in FY 2023-24. The increase was primarily due to annual increments provided to employees, additional manpower cost from Raigarh unit pursuant to merger of JSW Ispat Special Products Limited (JISPL) from July 31, 2023, increase in overall headcount due to capacity additions and increase in managerial remuneration conseguent to increase in profits. The overall headcount increased to 15,493 as on March 31, 2024 from 13,884 as on March 31, 2023.
6.1.7 Manufacturing and Other Expenses (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) 1 | |
| Other Expenses | 29,868 | 31,190 | -1,322 | -4% |
Manufacturing and other expenses decreased 4% y-o-y to Rs. 29,868 crore primarily due to decrease in power S fuel costs by 16% partially offset by increase in other manufacturing costs on account of increase in production volumes by 7% and higher ocean freight and domestic freight cost due to increase in sales volumes by 8%.
The power and fuel cost decreased 16% y-o-y to Rs. 11,575 crore primarily on account of decline in steam coal prices, decline in natural gas prices and partial replacement of thermal power with renewable power available at lower costs.
The steam coal prices and natural gas prices were higher in FY 2022-23 owing to energy crises following the Russia-Ukraine conflict.
Stores and spares consumption increased 6% y-o-y to Rs. 5,100 crore, primarily on account of overall increase in production by 7% y-o-y.
The ocean freight expenditure increased 29% y-o-y to Rs. 1,001 crore primarily on account of increase in exports of steel products by 27%. The domestic freight expenses increased by 23% y-o-y to Rs. 6,345 crore due to increase in domestic sales volume despatches by 6% and increase in iron ore despatches.
Fledging Cost/Net exchanges loss decreased by 81% y-o-y to Rs. 292 crore as the rupee depreciation against the US dollar was 1.4% during FY 2023-24 as against the rupee depreciation of 8.5% in the previous year.
6.1.8 Finance Cost (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Finance Cost | 6,108 | 5,023 | 1,085 | 22% |
Finance cost increased 22% y-o-y to Rs. 6,108 crore primarily on account of higher borrowings and an increase in benchmark rates of domestic and foreign currency borrowings as central banks across the world increased interest rates to contain inflation. The increase in finance cost was also attributable to increase in borrowings pursuant to merger of JSW Ispat Special Products Limited (JISPL) from July 31, 2023 and increase in interest cost on acceptances as the SOFR rates increased during the year.
6.1.9 Depreciation and Amortisation
| FY 2023-24 | FY 2022-23 | Change | Growth (%) 1 | |
| Depreciation and amortisation | 5,435 | 4,952 | 483 | 10% |
Depreciation and amortisation increased 10 % y-o-y to Rs. 5,435 crore primarily due to increase in depreciation cost on account of merger of JISPL, higher normal depreciation on account of capitalisation of Coke Oven 5 Battery B at Vijayanagar, balance facilities relating to Dolvi 10 MTPA expansion, mining eguipment at Odisha, and other special and sustaining capital expenditure and higher accelerated depreciation on certain assets considering the revision in useful lives of assets.
6.1.10 Tax Expense/Credit
Tax expense was Rs. 4,061 crore compared to Rs. 2,031 crore in FY 2022-23, primarily due to higher profitability and a non-cash tax charge of Rs. 1,031 crore pertaining to the previous years on account of tax regime change. During the year ended March 31, 2024, the Company had elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 to pay corporate income tax at 22% plus surcharge and cess (aggregating to tax rate of 25.17%) from the financial year 2022-23. Accordingly, the Company had re-measured its current tax and deferred tax charge for the year ended March 31, 2023 basis the new tax regime and recognised a non-cash tax charge of Rs. 1,031 crore pertaining to the previous year mainly representing write off of MAT credit not availed and change in tax rate on deferred tax assets of the Company.
In view of this exercise of the option to transition to the new regime, the Company has recognised provision for current tax and deferred tax for the year ended March 31, 2024 at the tax rate of 25.17% with necessary tax adjustments. The effective tax rate was 25.04% for FY 2023-24.
6.1.11 Exceptional Items
Exceptional Items Includes
> Impairment provision of Rs. 1,279 crore towards investments and loans provided to a subsidiary in US and a reversal of impairment provision of Rs. 1,039 crore for loans given and financial guarantees provided to a subsidiary in Netherlands mainly on account of significant improvement in the business of its Italian subsidiaries.
> Pursuant to the merger of CSSL and 1SWISPL becoming effective on July 31, 2023, the existing investments of the Company in CSSL as on July 31, 2023 have been fair valued as reguired by IND AS - 103 Business Combinations and a resultant gain of Rs. 590 crore have been recognised as an exceptional gain.
> Provision towards Green Cess amounting to Rs. 389 crore for the period from 2013 till September 2023.
6.1.12 Property,
Plant and Equipment (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Tangible assets | 74,457 | 69,851 | 4,606 | 7% |
| Capital work-in-progress | 10,504 | 10,271 | 233 | 2% |
| Goodwill | 413 | 0 | 413 | NA |
| Right to use asset | 2,786 | 3,404 | -618 | -18% |
| Intangible assets | 1,930 | 1,801 | 129 | 7% |
| intangible assets under development | 352 | 235 | 117 | 50% |
| Total Property, Plant and Equipment |
90,442 | 85,562 | 4,880 | 6% |
Net block of Property, Plant and Eguipment increased by Rs. 4,606 crore primarily on account of acguisition of Raigarh assets amounting to Rs. 3,502 crore pursuant to the JISPL merger becoming effective on July 31,2023, capitalisation of assets amounting to Rs. 6,094 crore relating to Battery B of coke oven 5 of capacity 0.75 MTPA at Vijayanagar, Dolvi Phase II raw material handling system, special projects and sustenance capex across all the plant locations partially offset by depreciation charge for the year.
The right to use asset decreased by Rs. 618 crore to Rs. 2,736 crore primarily on account of acguisition of the DRI plant, CDQ facilities and power plant under the Build Own Operate and Transfer agreement during the year.
Pursuant to the merger of JISPL with the Company, the purchase consideration paid has been allocated in accordance with the Ind AS 103 Business Combinations on the basis of fair value of the acguired assets and liabilities. Accordingly, the Company has recognised goodwill of Rs. 413 crore on account of this acguisition.
6.1.13 Investments (Rs. in crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| investments in subsidiaries, associates and joint ventures | 25,195 | 17,216 | 7,979 | 46% |
| Other Investments | 4,946 | 7,104 | -2,158 | -30% |
| Total Investments | 30,141 | 24,320 | 5,821 | 24% |
Investments in subsidiaries, associates and joint ventures increased to Rs. 25,195 crore primarily due to additional investment of Rs. 5,735 crore in equity investments in JSW Vijayanagar Metallics Limited for setting up the 5 MTPA steel project at Vijayanagar, acguisition of Mivaan Steel Limited pursuant to the merger of JISPL effective July 31, 2023, investments made in 1SW Paints Private Limited and additional investment of Rs. 707 crore in 1SW Utkal Steel Limited to set up a 30 MTPA slurry pipeline in Odisha and Pellet plant at latadhar Odisha. The decrease in the other investments to Rs. 4,946 crore is on account of redemption of Non-convertible Bonds issued by Piombino Steel Limited, a subsidiary of the Company, partially offset by increase in the fair value of eguity stake of 1SW Energy Limited due to increase in share prices.
6.1.14 Loans and Advances (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Long-term Loans and Advances | 11,501 | 5,346 | 6,155 | 115% |
| Short-term Loans and Advances | 4 | 93 | -89 | -96% |
| Total Loans and Advances | 11,505 | 5,439 | 6,066 | 112% |
Loans and advances increased primarily due to loan extended to 1SW Vijayanagar Metallics Limited amounting to Rs. 1,276 crore for setting up the 5 MTPA steel project at Vijayanagar, additional loan extended to Piombino Steel Limited, amounting to Rs. 3,144 crore for redeeming the Non-convertible Bonds issued by them and loans extended to overseas subsidiaries to cater to the interest and principal repayment obligations.
6.1.15 Other Financial Assets (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Non-current financial Assets | 5,618 | 4,480 | 1,138 | 25% |
| Other Current financial Assets | 1,501 | 1,522 | -21 | -1% |
| Total Financial Assets | 7,119 | 6,002 | 1,117 | 19% |
The other non-current financial assets increased to Rs. 5,618 crore on account of increase in the GST incentive receivable from the state of Maharashtra and Karnataka, and the increase in accrued interest income on loans extended to certain overseas subsidiaries.
6.1.16 Other
Non-Financial Assets (Rs. m crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Non-Current Assets | 3,773 | 3,499 | 274 | 8% |
| Other Current Assets | 3,580 | 3,083 | 497 | 16% |
| Total Non-financial Assets | 7,353 | 6,582 | 771 | 12% |
The other non-current assets increased by Rs. 274 crore to Rs. 3,773 crore primarily on account of accumulation of GST input tax credit and increase in prepaid amounts, which was partially offset by a decrease in the capital advances made to suppliers for capital projects on account of completion of supply of goods or services.
The other current assets increased by Rs. 497 crore to Rs. 3,580 crore on account of increase in GST input tax credit available for set off by reduction in advances to suppliers and reduction in security deposits.
6.1.17 Inventories (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Raw materials | 10,046 | 8,602 | 1,444 | 17% |
| Work-in-Progress | 623 | 688 | -65 | -10% |
| Semi-finished/Finish ed goods | 9,942 | 7,665 | 2,277 | 30% |
| Production consumables and stores a spares | 2,622 | 2,561 | 61 | 2% |
| Others | 1 | 1 | 0 | 0% |
| Total Inventories | 23,234 | 19,517 | 3,717 | 19% |
The increase in inventory was primarily due to an increase in iron ore fines and coking coal inventory by Rs. 1,444 crore as iron ore fines inventory increased by 7.21 lakh tonnes with iron ore prices increasing by 19% in FY 2023-24. The coal inventory also increased by 7.22 lakh tonnes and coal prices fell by 12% in FY 2022-23. Limestone and other raw materials cost witnessed a marginal increase.
Work-in-progress and semi-finished/finished goods increased by Rs. 2,277 crore primarily due to an increase in steel inventory by 4.69 lakh tonnes and captive mines iron ore inventory by 19.63 lakh tonnes.
Average raw materials inventory (including own mines iron ore) holding as on March 31, 2024 increased to 57 days from 48 days as on March 31, 2023 primarily due to the increase in both iron ore and coking coal inventory.
Average finished goods inventory holding increased to 31 days as on March 31, 2024 from 23 days as on March 31, 2023 primarily due to the increase in finished goods inventory on account of higher volumes and inventory increase during Q3 FY 2024 due to increased imports.
6.1.18 Trade Receivables (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Total Debtors | 6,718 | 6,218 | 500 | 8% |
| Less: Provision for Doubtful debts | -220 | -218 | -2 | 0% |
| Trade Receivables | 6,498 | 6,000 | 498 | 8% |
Trade receivables increased by Rs. 498 crore to Rs. 6,498 crore due to higher sales volumes during the year. However, the average collection period as on March 31, 2024, was maintained at 17 days.
6.1.19 Cash and Bank Balances (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Cash and Cash Equivalents | 4,953 | 13,668 | -8,715 | -64% |
| Bank Balances | 3,176 | 5,048 | -1,872 | -37% |
| Total cash and bank balances | 8,129 | 18,716 | -10,588 | -57% |
To meet short-term cash commitments and repayment obligations, the Company parks surplus funds in short-term and highly liguid instruments which represent cash and cash eguivalents and other bank balances. Total cash and bank balances decreased to Rs. 8,129 crore from Rs. 18,716 crore primarily on account of lower cash and bank balances due to a reduction in term deposit accounts with maturity less than 3 months at inception and a reduction in maturity more than 3 months but less than 12 months at inception as the cash and bank balances were utilised for capex and working capital reguirements.
6.1.20 Borrowings (Rs. in crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Long-term borrowings (including current maturities of long term debt) | 58,823 | 55,167 | 3,656 | 7% |
| Short-term borrowings (excluding current maturities of long term debt) | 0 | 3 | -3 | -100% |
| Total borrowings | 58,823 | 55,170 | 3,653 | 7% |
Long-term borrowings (including current maturity of long-term debt) increased primarily due to the net drawing of secured term loans by Rs. 1,651 crore, net increase in unsecured term loans by Rs. 2,288 crore for incurring capital expenditure and general corporate purposes which was offset by the net redemption of debentures by Rs. 840 crore. Deferred government loans increased by Rs. 316 crore.
6.1.21 Acceptances (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) 1 | |
| Acceptances | 14,460 | 20,740 | -6,280 | -30% |
Acceptances decreased by Rs. 6,280 crore to Rs. 14,460 crore during FY 2023-24 due to decline in coking coal prices and repayment of acceptances.
6.1.22 Trade Payables (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) 1 | |
| Trade payables | 12,742 | 9,965 | 2,777 | 28% |
Trade payables increased by Rs. 2,777 crore to Rs. 12,742 crore primarily due to increase in creditors for goods.
6.1.23 Other Financial Liabilities (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Financial Liabilities | 835 | 1,159 | -324 | -28% |
| Lease Liabilities | 2,356 | 2,032 | 324 | 16% |
| Other current Financial Liabilities (excluding current maturities of long term debt) | 5,939 | 5,889 | 50 | 1% |
| Total otherfinancial liabilities | 9,130 | 9,080 | 50 | 1% |
Other current financial liabilities decreased by Rs. 324 crore to Rs. 835 crore mainly due to the decrease in allowances for financial guarantees conseguent to reversal of impairment provision of financial guarantees provided to a subsidiary in the Netherlands mainly on account of significant improvement in the business of its Italian subsidiaries.
Lease liabilities increased by Rs. 324 crore to Rs. 2,356 crore primarily on account of addition in lease liabilities for railway wagons taken on lease, increase in lease liabilities pursuant to contracts entered for cargo handling at ports and lease assets acguired as a result of the 1ISPL merger, partially offset by the repayment of principal amount on leases.
Other current financial liabilities increased by Rs. 50 crore to Rs. 5,939 crore primarily on account of increase in interest accrued but not due on borrowings, higher provisions for marketing rebates which was partially offset by the decrease in retention money payable for capital expenditure.
6.1.24 Other Liabilities (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other non-current Liabilities | 33 | 34 | -i | -3% |
| Other current Liabilities | 3,311 | 3,656 | -345 | -9% |
| Total other liabilities | 3,344 | 3,690 | -346 | -9% |
Other current liabilities decreased by Rs. 345 crore to Rs. 3,311 crore due to decrease in advances from customers as the advances received under the five-year Advance Payment and Supply Agreement (APSA) were settled by way of export of steel products and increase in statutory liabilities due to provisions made for Goa Green cess and other statutory payments.
6.1.25 Deferred
Tax Liabilities (net) (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Deferred tax liabilities | 9,320 | 7,880 | 1,440 | 18% |
| MAT Credit entitlement | 0 | -420 | 420 | -100% |
| Total deferred tax liabilities (net) | 9,320 | 7,460 | 1,860 | 25% |
Deferred tax liabilities increased by Rs. 1,440 crore to Rs. 9,320 crore, primarily on account of additional liability recognised due to adoption of new tax regime wherein deferred tax assets / liabilities are re-stated from 34.94% to 25.17% and utilisation of tax losses acguired pursuant to merger with 1ISPL. MAT credit was written off due to transition to the new tax regime.
243
6.1.26 Capital Employed (Rs. incrore)
Total capital employed increased 8% y-o-y to Rs. 1,17,235 crore in FY 2023-24 primarily due to capitalisation of Property, Plant S Equipment and increase in net current assets. Return on average capital employed for FY 2023-24 was 14 %, as against 10% in FY 2022-23 due to higher earnings.
6.1.27 Own Funds (Rs. in crore)
1SW Steels net worth increased from Rs. 63,659 crore to Rs. 75,283 crore as on March 31,2024. Book value per share was at Rs. 307.75 as on March 31, 2024, as compared to Rs. 263.36 as on March 31, 2023.
6.1.28 Other Key Financial Indicators
| S No Ratios | FY 2023-24 | FY 2022-23 | Change | Growth (%) | Reason for Change j |
| 1. Debtors Turnover (no. of days) | 17 | 17 | - | - | |
| 2. Raw Materials Inventory (including own mines) Turnover (no. of days) | 57 | 48 | 9 | 19% | increase was primarily due to increase in iron ore inventory due to reguirement of minimum stock levels for un-interrupted operations, increase iron ore prices and increase in coking coal inventory to optimise logistics and coal blend. |
| 3. Finished Goods inventory Turnover (no. of days) | 23 | 16 | 7 | 44% | Finished goods inventory increased primarily due to lower offtake in 03 of FY 2023-24 on account of increase in steel imports and de-stocking anticipating decline in steel prices. |
| 4. inventory Turnover (no. of days) | 78 | 71 | 7 | 10% | increase in the raw material inventory and finished goods inventory as explained above. |
| 5. Interest Coverage Ratio | 4.71 | 4.16 | 0.55 | 13% | The interest coverage ratio improved due to improved EBITDA margins over the previous year, |
| 6. Current Ratio | 0.87 | 1.00 | -0.12 | -13% | Current ratio has decreased on account of decrease in cash and cash equivalents and bank balances. |
| 7. Debt Eguity Ratio | 0.78 | 0.87 | -0.09 | -10% | The debt equity ratio was lower as borrowing increased by Rs. 3,652 crore and the profit aftertax for the year was Rs. 8,041 crore. |
| 8. Operating EBiDTA Margin (%) | 16.3% | 11.7% | 4.59% | 39% | The Company achieved an annual operating EBITDA of Rs. 21,980 crore, an increase of 43% y-o-y with an EBITDA margin of 16.3%. EBITDA per tonne was at Rs. 1 0,357 during FY 2023-24, higher by 33% y-o-y primarily on account of lower coking coal prices, which were elevated in the previous year, lower power and fuel costs partially offset by decline in sales realisations and higher iron ore prices. |
| 9 Net profit Margin (%) | 5.95% | 3.75% | 2.20% | 59% | The net profit margin increased primarily on account of increase in operating profit in the current year, |
6.2 Consolidated (Rs. m crore)
| FY 2023-24 | FY 2022-23 | Growth (%) 1 | |
| Revenue from operations | 175,006 | 165,960 | 5% |
| Other income | 1,004 | 1,030 | -3% |
| Operating EBITDA | 28,236 | 18,547 | 52% |
| EBITDA margin (%) | 16.13% | 11.18% | 44% |
| Depreciation and amortisation expense | 8,172 | 7,474 | 9% |
| Finance costs | 8,105 | 6,902 | 17% |
| Profit before exceptional items | 12,963 | 5,201 | 149% |
| Share of prof it/(loss) of joint ventures and associates (net) | (172) | (137) | 26% |
| Exceptional items | (589) | (591) | 0% |
| Tax expense/(Credit) | 4,407 | 1,516 | 191% |
| PAT | 8,973 | 4,139 | 117% |
| Earnings per share (diluted) (Rs. ) | 36.17 | 17.14 | 111% |
6.2.1 Production and sales
In FY 2023-24, the Company reported its highest ever annual consolidated crude steel production of 26.43 MnT, with an average capacity utilisation of 92% at Indian operations. Crude steel production increased by 9% y-o-y primarily due to the ramp-up of the Dolvi Phase II expansion of 5 MTPA which was commissioned in FY 2021-22, additional production volumes from Raigarh unit and Mivaan Steel Limited pursuant to merger of 1SW Ispat Special Products Limited (1ISPL) from Duly 31, 2023, increased production from Bhushan Power and Steel Limited (BPSL) pursuant to ramp up of capacity post commissioning of the Phase 1 expansion to 3.5 MNTPA and improvement in capacity utilisation at 1SW Ohio due to improved steel demand in the US.
During the year under review, the Company reported its highest ever annual steel sales volume of 24.78 MnT, up by 11% y-o-y. The consolidated India operations export of steel products stood at 3.4 MnT, up by 23% y-o-y and accounting for 14% of the total sales, as against 13% in FY 2022-23.
The exports of steel products were higher in FY 2022-23 as there was no export duty levy during the year as compared to export duty levy of 15% between May 2022 and November 2022. The consolidated India operations domestic sales stood at 20.57 MnT an increase of 8% y-o-y, driven by domestic demand for steel. The Company achieved its highest year Value-Added Special Products (VASP) sales at 14.65 MnT, an increase of 19% y-o-y, and accounted for 61% of the total sales volume for the year.
The EAF-based steel manufacturing facility in Ohio, US, produced 9,62,697 net tonnes of Slabs during FY 2023-24. Capacity utilisation was 66% during the year. Sales volumes for FY 2023-24 stood at 2,58,492 net tonnes of HRC and 6,47,371 net tonnes of Slabs.
6.2.2 Revenue and EBITDA
In FY 2023-24, the Companys consolidated revenue from operations grew by 6% y-o-y to Rs. 175,006 crore, primarily on account of the increase in dispatches by 11%, partly offset by lower sales realisations due to decline in international steel prices.
Consolidated operating EBITDA was Rs. 28,236 crore, an increase of 52% y-o-y with an EBITDA margin of 16.1%. EBITDA per tonne was Rs. 11,394 crore during FY 2023-24, higher by 38% y-o-y, primarily on account of the decline in coking coal prices and power and fuel costs, partially offset by lower sales realisations.
The domestic subsidiaries posted an operating EBITDA of Rs. 5,025 crore, as against an operating EBITDA of Rs. 2,791 crore during the previous year, primarily due to higher EBITDA from 1SW Steel Coated Products Limited and Bhushan Power S Steel Limited (BPSL) compared to previous year and additional EBIDTA on account of Mivaan Steel Limited becoming subsidiary of the Company w.e.f. from Duly 31, 2023 by virtue of amalgamation of 1ISPL. The overseas subsidiaries posted an operating EBITDA of Rs. 1,203 crore, as against an operating EBITDA of Rs. 554 crore during the previous year, on account of higher profitability from US Baytown operations and 1SW Italy operations, and lower losses from the US Ohio operations.
Revenue analysis
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Turnover | 172,588 | 163,646 | 8,942 | 5% |
| Other Operating Revenues | 2,418 | 2,314 | 104 | 4% |
| Total Revenue from Operations | 175,008 | 165,960 | 9,046 | 5% |
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Indian Operations* | 181,132 | 154,516 | 6,616 | 4% |
| Overseas Operations | 45,911 | 44,582 | 1,329 | 3% |
| Other Eliminations a Adjustments | -34,455 | -35,452 | 997 | -3% |
| Total Turnover | 172,588 | 163,646 | 8,942 | 5% |
The total turnover increased by Rs. 8,942 crore to Rs. 172,588 crore in FY 2023-24 from Rs. 163,646 crore in FY 2022-23. Turnover from Indian Operations increased by Rs. 6,616 crore (4% y-o-y) primarily due to the increase in domestic despatch volumes by 8% y-o-y on account of better domestic demand driven by the Governments infrastructure spend, partially offset by the decline in sales realisations by 6%. The domestic volume increase was primarily driven by 11% y-o-y growth in the Construction and Infrastructure segment sales, 12% y-o-y growth in the Industrial segment, 5% y-o-y growth in the Auto segment and 3% y-o-y growth in the Retail segment. Export volume was up 23% y-o-y. Export volume contributed 14% in FY 2023-24 as compared to 13% in FY 2022-23 mainly due to higher exports to Europe and the Middle East. The exports of steel products were higher in FY 2022-23 as there was no export duty levy during the year as compared to export duty levy of 15% between May 2022 and November 2022.
Turnover from Overseas Operations increased 3% y-o-y primarily due to higher volumes on account of improved market conditions.
6.2.3 Other Operating Income (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Indian Operations | 2,277 | 2,101 | 176 | 4% |
| Overseas Operations | 141 | CO CM |
-72 | -34% |
| Total Other operating income | 2,418 | 2,314 | 104 | 4% |
Other operating revenue for Indian operations was Rs. 2,277 crore in FY 2023-24 as compared to Rs. 2,101 crore in FY 2022- 23, higher by Rs. 176 crore. Other operating income increased largely due to higher Government incentive due to lower sales realisation, scrap sales and job work income. This increase was partially offset by reduction in a lower export incentive income as the Company exported under the Advance Authorisation Scheme as against availing duty draw back income in the previous year decrease in Export Promotion Capital Goods (EPCG) grant income.
Other operating income for overseas operations was Rs. 141 crore in FY 2023-24 as compared to Rs. 213 crore in FY 2022-23 lower by Rs. 72 crore. Other operating income is lower primarily due to one-time gain received in previous year towards scrap sales on demolition, rebates and refunds received towards electricity and power charges.
6.2.4 Other Income (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other income | 1,004 | 1,030 | -26 | -3% |
| Indian Operations | 964 | 978 | -14 | -1% |
| Overseas Operations | 266 | 176 | 91 | 52% |
| Other Eliminations a Adjustments | -226 | -124 | -103 | 83% |
| Total Other Income | 1,004 | 1,030 | -26 | -3% |
Other income was Rs. 1,004 crore in FY 2023-24 as compared to Rs. 1,030 crore, lower by Rs. 26 crore. Other income was lower due to one-time gain on deemed disposal on dilution of stake in ajoint venture of Rs. 135 crore, and insurance claim of Rs. 30 crore. The decrease is partially offset by increase in interest income from bank deposits by Rs. 143 crore.
6.2.5 Materials (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Cost of materials consumed | 91,667 | 93,334 | -1,667 | -2% |
| Mining premium and royalties | 10,011 | 7,457 | 2,554 | 34% |
| Total Materials | 101,678 | 100,791 | 887 | |
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Indian Operations | 95,012 | 95,939 | -927 | -1% |
| Overseas Operations | 39,021 | 38,246 | 775 | 2% |
| Other Eliminations a Adjustments | -32,355 | -33,394 | 1,039 | 3% |
| Total Materials | 101,678 | 100,791 | 887 |
Overall expenditure on material consumption increased by 1% y-o-y to Rs. 101,678 crore on account of the decrease in cost of Indian Operations and the increase in cost of Overseas Operations.
Expenditure on material consumption for Indian operations decreased 1% y-o-y to Rs. 95,012 crore primarily on account of 24% decrease in coking coal prices in FY 2023-24 as coking coal prices were higher due to supply chain disruptions and the Russia-Ukraine conflict in FY 2022-23. This decrease on raw materials cost was partially offset by an increase in iron ore cost and increased consumption of raw materials due to increase in production volumes by 8%.
Mining premium and royalties cost increased by 34% in FY 2023-24 to Rs. 10,011 crore from Rs. 7,457 crore in FY 2022-23, on account of an increase in mining premium and royalty cost due to increase in iron ore IBM prices conseguent to elevated international iron ore prices leading to increase in exports of iron ore /pellets, resulting in pressure on domestic supply.
Expenditure on material consumption for overseas operations increased by 2% y-o-y to Rs. 39,021 crore primarily on account of increased volumes.
6.2.6 Employee Benefits Expenses (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Employees Remuneration and Benefits | 4,591 | 3,915 | 676 | 17% |
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Indian Operations | 3,432 | 2,872 | 560 | 19% |
| Overseas Operations | 1,159 | 1,043 | 116 | 11% |
| Total Employee Remuneration | 4,591 | 3,915 | 676 | 17% |
Employee benefits expenses for Indian operations were higher by Rs. 560 crore at Rs. 3,432 crore in FY 2023-24. The increase was primarily due to annual increments provided to employees, additional manpower cost from Raigarh unit pursuant to merger of JSW Ispat Special Products Limited (JISPL) from July 31, 2023, increase in overall headcount due to capacity additions and increase in managerial remuneration conseguent to increase in profits.
Employee benefits expenses for overseas operations were higher by Rs. 116 crore at Rs. 1,159 crore in FY 2023-24. The increase was primarily due to annual increments provided to employees, increase in overall headcount due to increase in capacity utilisation. The overall headcount increased to 25,550 as on March 31, 2024 from 23,587 as on March 31, 2023.
6.2.7 Manufacturing and Other
EXpenSeS (Rs. in crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Expenses | 40,501 | 42,707 | -2,206 | -5% |
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Indian Operations | 37,959 | 39,902 | -1,944 | -5% |
| Overseas Operations | 4,871 | 5,070 | -199 | -4% |
| Other Eliminations a Adjustments | -2,329 | -2,265 | -64 | 3% |
| Total Other Expenses | 40,501 | 42,707 | -2,206 | -5% |
Manufacturing and other expenses for Indian operations decreased 5% y-o-y to Rs. 37,959 crore primarily due to decrease in power S fuel costs by 14% partially offset by increase in other manufacturing costs on account of increase in production volumes by 8% and higher ocean freight and domestic freight cost due to increase in sales volumes by 10%.
The power and fuel cost decreased by 14% to Rs. 14,818 crore from Rs. 17,186 crore primarily on account of decline in steam coal prices, decline in natural gas prices and partial replacement of thermal power with renewable power available at lower costs. The steam coal prices and natural gas prices were higher in FY 2022-23 owing to energy crises following the Russia-Ukraine conflict.
Stores and spares consumption increased 8% y-o-y to Rs. 6,868 crore, primarily on account of overall increase in production by 8%. The freight expenditure increased 11% y-o-y to Rs. 8,295 crore primarily on account of increase in exports of steel products by 23% and due to increase in domestic sales volume despatches by 8% and increase in iron ore despatches.
Hedging Cost/Net exchanges loss decreased by 81% y-o-y to Rs. 346 crore as the rupee depreciation against the US dollar was 1.4% during FY 2023-24 as against the rupee depreciation of 8.5% in the previous year.
6.2.8 Finance Cost (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Finance Cost | 8,105 | 6,902 | 1,203 | 17% |
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Indian Operations | 7,152 | 6,195 | 957 | 15% |
| Overseas Operations | 1,630 | 1,301 | 329 | 25% |
| Other Eliminations a Adjustments | -677 | -594 | -83 | 14% |
| Total Finance Cost | 8,105 | 6,902 | 1,203 | 17% |
Finance cost increased 17% y-o-y to Rs. 8,105 crore primarily on account of higher borrowings and an increase in benchmark rates of domestic and foreign currency borrowings as the central banks across the world increased interest rates to contain inflation. The increase in finance cost was also attributable to increase in borrowings pursuant to merger of 1SW Ispat Special Products Limited (1ISPL) from July 31, 2023 and increase in interest cost on acceptances as the S0FR rates increased during the year.
6.2.9 Depreciation and Amortisation (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Depreciation and amortisation | 8,172 | 7,474 | 698 | 9% |
| Indian Operations | 7,494 | 6,875 | 619 | 9% |
| Overseas Operations | 558 | 520 | 38 | 7% |
| Other Eliminations a Adjustments | 120 | 79 | 41 | 51% |
| Total Depreciation and Amortisation | 8,172 | 7,474 | 698 | 9% |
Depreciation and amortisation increased by 9 % y-o-y to Rs. 8,172 crore primarily due to
> Indian operations increased by 9% to Rs. 7,494 crore due to increase in depreciation cost on account of merger of JISPL amounting to Rs. 224 crore, acguisition of NSAIL amounting to Rs. 64 crore, higher normal depreciation of Rs. 184 crore
on account of capitalisation of Coke Oven 5 Battery B at Vijayanagar, balance facilities relating to Dolvi 10 MTPA expansion, mining eguipment at Odisha, and other special and sustaining capital expenditure and higher accelerated depreciation on certain assets considering the revision in useful lives.
> Overseas operations increased by 7% to Rs. 558 crore due to sustaining capital expenditure and higher accelerated depreciation on certain assets considering the revision in useful lives.
6.2.10 Tax Expense/Credit
Tax expense was Rs. 4,407 crore compared to Rs. 1,516 crore in FY 2022-23 primarily due to higher profitability and a non-cash tax charge of Rs. 1,031 crore pertaining to the previous years on account of the tax regime change of the Company.
During the year ended March 31, 2024, the Company had elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 to pay corporate income tax at 22% plus surcharge and cess (aggregating to tax rate of 25.17%) from the financial year 2022-23. Accordingly, the Company had re-measured its current tax and deferred tax charge for the year ended March 31, 2023 basis the new tax regime and recognised a non-cash tax charge of Rs. 1,031 crore pertaining to the previous year mainly representing write off of MAT credit not availed and change in tax rate on deferred tax assets of the Company. In view of this exercise of the option to transition to the new regime, the Company has recognised provision for current tax and deferred tax for the year ended March 31, 2024 at the tax rate of 25.17% with necessary tax adjustments.
6.2.11 Exceptional Items
Exceptional Items Includes
a. Rs. 780 crore recognised as an exceptional gain pursuant to merger
b. Provision towards Green Cess amounting to Rs. 389 crore for the period from 2013 till September 2023
c. Net gain amounting to Rs. 198 crore pursuant to the sale of property, plant and eguipment and mineral rights held by wholly owned subsidiary of the Company in West Virginia
6.2.12 Property,
Plant and Equipment (Rs. m crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Property, Plant and Equipment | 105,123 | 97,699 | 7,424 | 8% |
| Capital work-in-progress | 29,216 | 21,921 | 7,295 | 33% |
| investment Property | 140 | 86 | 54 | 63% |
| Goodwill | 639 | 128 | 511 | 399% |
| Right to use asset | 4,477 | 4,699 | -222 | -5% |
| Intangible assets | 2,082 | 1,840 | 242 | 13% |
| intangible assets under development | 460 | 245 | 215 | 88% |
| Total Property, Plant and Equipment |
142,137 | 126,618 | 15,519 | 12% |
Net block of Property, Plant and Eguipment increased by Rs. 7,424 crore primarily on account of acguisition of Raigarh and Raipur assets amounting to Rs. 3,860 crore pursuant to the JISPL merger becoming effective on July 31, 2023, Rs. 511 crore pursuant to acguisition of NSAIL, capitalisation of assets amounting to Rs. 10,850 crore relating to Battery B of coke oven 5 of capacity 0.75 MTPA at Vijayanagar, Dolvi Phase II raw material handling system, HSM mill at 1VML, special projects and sustenance capex across all the plant locations partially offset by depreciation charge for the year.
The Right to use asset decreased by Rs. 222 crore to Rs. 4,477 crore primarily on account of acguisition of the DRI plant, CDQ facilities and power plant under the Build Own Operate and Transfer agreement during the year.
Pursuant to the merger of JISPL with the Company, the purchase consideration paid has been allocated in accordance with the Ind AS 103 Business Combinations on the basis of fair value of the acguired assets and liabilities. Accordingly, the Group has recognised goodwill of Rs. 458 crore on account of this acguisition.
Pursuant to the acguisition of NSAIL by the subsidiary of the Company, the purchase consideration paid has been allocated in accordance with the Ind AS 103 Business Combinations on the basis of fair value of the acguired assets and liabilities. Accordingly, the Group has recognised goodwill of Rs. 51 crore on account of this acguisition.
6.2.13 Investments (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Investments in associates and joint ventures | 1,709 | 700 | 1,009 | 144% |
| Other Investments | 5,534 | 4,101 | 1,433 | 35% |
| Total Investments | 7,243 | 4,801 | 2,442 | 51% |
Investments increased to Rs. 7,243 crore from Rs. 4,801 crore in FY 2022-23, an increase of Rs. 2,442 crore due to increase in fair value of JSW energy shares by Rs. 2,927 crore, additional investment of Rs. 250 crore in JSW Paints, partially offset by reduction in investment in Creixent Special Steels Limited of Rs. 760 crore pursuant to the merger of CSSL with the Company effective July 31, 2023.
6.2.14 Loans and Advances (Rs. m crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Long-term Loans and Advances | 120 | 130 | -10 | -8% |
| Short-term Loans and Advances | 4 | 717 | CO | -99% |
| Total Loans and Advances | 124 | 847 | -723 | -85% |
Loans and advances decreased by Rs. 723 crore primarily due to the redemption of ICD given by JSW Coated by Rs. 505 crore, and cancellation of loans pursuant to merger of CSSL S JISPL with the Company effective July 31, 2023.
6.2.15 Other Financial Assets (Rs. m crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Non-current financial Assets | 8,135 | 4,799 | 1,336 | 28% |
| Other Current financial Assets | 1,752 | 1,701 | 51 | 3% |
| Total Other Financial Assets |
7,887 | 8,500 | 1,387 | 21% |
The other Non-current financial assets increased to Rs. 7,887 crore on account of increase in the GST incentive receivable from the state of Maharashtra and Karnataka.
6.2.16 Other
Non-Financial Assets (Rs. mcrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Non-Current Assets | 6,603 | 5,392 | 1,211 | 22% |
| Other Current Assets | 4,885 | 4,277 | 608 | 14% |
| Total Other Non-Financial Assets | 11,488 | 9,669 | 1,819 | 19% |
The other Non-current assets increased by Rs. 1,211 crore to Rs. 6,603 crore primarily on account of accumulation of GST input tax credit and increase in prepaid amounts, which was partially offset by a decrease in the capital advances made to suppliers for capital projects on account of completion of supply of goods or services.
The other current assets increased by Rs. 608 crore to Rs. 4,885 crore on account of increase in GST input tax credit available for set off by reduction in advances to suppliers and reduction in security deposits.
6.2.17 Inventories (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Raw materials | 16,349 | 15,363 | 986 | 6% |
| Work-in-Progress | 1,525 | 1,446 | 78 | 5% |
| Semi-finished/Finished goods |
16,257 | 12,672 | 3,585 | 28% |
| Production consumables and stores a spares | 3,683 | 3,653 | 31 | 1% |
| Others | 1 | 1 | - | 0% |
| Total Inventories | 37,815 | 33,135 | 4,680 | 14% |
The increase in raw materials inventory was primarily due to an increase in iron ore fines and coking coal inventory by Rs. 901 crore as iron ore fines inventory increased by 1.9 lakh tonnes. The coal inventory also increased by 7.62 lakh tonnes and average coal prices fell by 10% in FY 2023-24.
Work-in-progress and semi-finished/finished goods increased by Rs. 3,585 crore primarily due to an increase in steel inventory by 3.91 lakh tonnes and captive mines iron ore inventory by 19.63 lakh tonnes at Indian operations.
6.2.18 Trade Receivables (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Total Debtors | 7,852 | 7,408 | 444 | 6% |
| Less: Provision for Doubtful debts | -304 | -274 | -30 | 11% |
| Trade Receivables | 7,548 | 7,134 | 414 | 6% |
Trade receivables increased by Rs. 414 crore to Rs. 7,548 crore due to higher sales volumes during the year. The average collection period was maintained at 16 days.
6.2.19 Cash and Bank Balances (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Cash and Cash Equivalents | 8,030 | 15,424 | -7,394 | -48% |
| Bank a Bank Balances | 4,318 | 5,290 | -972 | -18% |
| Total Cash and Bank Balances | 12,348 | 20,714 | -8,366 | -40% |
To meet short-term cash commitments and repayment obligations, the Company parks surplus funds in short-term and highly liguid instruments which represent cash and cash eguivalents and other bank balances. Total cash and bank balances decreased to Rs. 12,348 crore from Rs. 20,714 crore primarily on account of lower cash and bank balances due to a reduction in term deposit accounts with maturity less than 3 months at inception and reduction in maturity more than 3 months but less than 12 months at inception as the cash and balances were utilised for capex and working capital reguirements.
6.2.20 Borrowings (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Long-term borrowings (including current maturities of long term debt) | 80,802 | 75,076 | 5,725 | 8% |
| Short-term borrowings (excluding current maturities of long term debt) | 4,773 | 3,767 | 1,007 | 27% |
| Total Borrowings | 85,575 | 78,843 | 8,732 | 9% |
Long-term borrowings (including current maturity of long-term debt) increased primarily due to the net drawing of secured and unsecured term loans for incurring capital expenditure and general corporate purposes which was offset by the redemption of debentures of Rs. 840 crore. Deferred government loans increased by Rs. 316 crore.
Short term borrowings increased by Rs. 1,007 crore to meet the working capital reguirements in Indian operations and overseas operations.
6.2.21 Acceptances (Rs. in crore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Acceptances | 17,854 | 25,739 | -8,085 | -31% |
Acceptances decreased by Rs. 8,085 crore to Rs. 17,654 crore durim FY 2023-24 due to decline in coking coal prices and repayment of acceptances.
6.2.22 Trade Payables (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Trade payables | 15,711 | 12,464 | 3,247 | 26% |
Trade payables increased by Rs. 3,247 crore partially due to increase in payables for goods, JISPL and NSAIL acguisition during the year.
6.2.23 Other Financial Liabilities (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other Financial Liabilities (non current) | 1,774 | 1,131 | 643 | 57% |
| Lease Liabilities | 2,409 | 2,011 | 398 | 20% |
| Other current Financial Liabilities | 8,446 | 7,976 | 470 | 6% |
| Total otherfinancial liabilities | 12,628 | 11,116 | 1,512 | 14% |
Other financial liabilities increased by Rs. 643 crore to Rs. 1,774 crore primarily on account of increase in retention money payable for capital projects. Lease liabilities increased by Rs. 398 crore to Rs. 2,409 crore primarily on account of addition in lease liabilities for railway wagons taken on lease, increase in lease liabilities pursuant to contracts entered for cargo handling at ports and lease assets acguired as a result of the JISPL merger, partially offset by the repayment of principal amount on leases. Other current financial liabilities increased by Rs. 470 crore to Rs. 8,445 crore primarily on account of increase in interest accrued but not due on borrowings, higher provisions for marketing rebates, payable for capital projects, which was partially offset by the decrease in retention money payable for capital expenditure.
6.2.24 Other Liabilities (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Other non-current Liabilities | 49 | 39 | 10 | 25% |
| Other current Liabilities | 4,564 | 4,457 | 107 | 2% |
| Total other liabilities | 4,613 | 4,496 | 117 | 3% |
Other current liabilities increased by Rs. 107 crore due to an increase in export obligation deferred income and an increase in statutory liabilities due to provisions made for Goa Green cess and other statutory payments, partially offset by decrease in advances from customers as the advances received under the five-year Advance Payment and Supply Agreement (APSA) were settled by way of export of steel products.
6.2.25 Deferred Tax Liabilities (net) (Rs. incrore)
| FY 2023-24 | FY 2022-23 | Change | Growth (%) | |
| Deferred tax liabilities | 9,659 | 7,936 | 1,723 | 22% |
| Deferred tax assets | -300 | -539 | 239 | -44% |
| Total deferred tax liabilities (net) | 9,359 | 7,397 | 1,962 | 27% |
Deferred tax liabilities increased by Rs. 1,723 crore to Rs. 9,659 crore due to reversal of deferred tax assets on account of utilisation of tax losses acguired pursuant to merger with JISPL and DTL has increased due to transition to new regime and resultant write off of DTA as well. MAT credit was written off due to transition to the new tax regime.
6.2.26 Own Funds (Rs. m crore)
JSW Steels net worth increased from Rs. 65,694 crore as on March 31, 2023 to Rs. 77,669 crore on a consolidated level as on March 31, 2024. Book value per share was at Rs. 307.85 as on March 31, 2024, as compared to Rs. 263.36 as on March 31, 2023.
6.2.27 Other Key Financial Indicators
| S No Ratios | FY 2023-24 | FY 2022-23 | Change | Growth (%) | Reason for Change j |
| 1. Debtors Turnover (no. of days) | 16 | 16 | - | 0.0% | |
| 2. Raw Materials Inventory (including own mines) Turnover (no. of days) | 68 | 39 | 29 | 74% | Increase was primarily due to increase in iron ore inventory due to reguirement of minimum stock levels for uninterrupted operations, increase iron ore prices and increase in coking coal inventory to optimise logistics and coal blend. |
| 3. Finished Goods Inventory Turnover (no. of days) | 32 | 25 | 7 | 28% | Finished goods inventory increased primarily due to lower offtake in 03 of FY 2023-24 on account of increase in steel imports and de-stocking anticipating decline in steel prices. |
| 4. Inventory Turnover (no. of days) | 101 | 95 | 6 | 6% | increase in the raw material inventory and finished goods inventory as explained above. |
| 5. Interest Coverage Ratio | 3.89 | 3.00 | 0.89 | 30% | The interest coverage ratio improved due to improved EBITDA margins over the previous year. |
| 6. Current Ratio | 0.98 | 0.97 | 0.01 | 1% | The current ratio improved primarily on account of improved working capital. |
| 7. Debt Equity Ratio | 1.07 | 1.18 | -0.11 | -9% | The debt equity ratio was lower as borrowing increased by ^6,733 crore and the profit after tax for the year was ^8,973 crore. |
| 8. Operating EBIDTA Margin (%) | 18.13% | 11.18% | 4.95% | 44% | The Group achieved an annual Operating EBITDA of Rs. 28,236 crore, an increase of 52% y-o-y with an EBITDA margin of 16.1%. EBITDA per tonne was at Rs. 11,394 during FY 2023-24, higher by 38% y-o-y primarily on account of lower coking coal prices, which were elevated in the previous year, lowerpowerand fuel costs partially offset by decline in sales realisations and higheriron ore prices. |
| 9. Net profit Margin (%) | 5.13% | 2.49% | 2.64% | 106% | The net profit margin increased primarily on account of increase in operations. |
JSW Steel Limited - Subsidiaries/JVS as on 31.03.2024
S. No. List of Subsidiaries
i Periama Holdings, LLC
2 JSW Steel (USA) Inc.
3 Purest Energy, LLC
4 Meadow Creek Minerals, LLC
5 Hutchinson Minerals, LLC
6 Planck Holdings, LLC
7 Lower Hutchinson Minerals, LLC
8 Caretta Minerals, LLC
9 Acero Junction Holdings, Inc.
10 JSW Steel USA Ohio, Inc.
11 JSW Panama Holdings Corporation
12 Inversiones Eurosh Limitada
13 JSW Natural Resources Limited
14 JSW Steel (Netherlands) B.V
15 JSW Steel (UK) Limited
16 JSW Natural Resources Mozambigue Limitada
17 JSW ADMS Carvao Lda
18 JSW Steel Italy S.r.l.
19 JSW Steel Italy Piombino S.p.A.
20 Piombino Logistics S.p.A.- A JSW Enterprise
21 GSI Lucchini S.p.A.
22 Nippon Ispat Singapore (PTE) Limited
23 JSW Steel Global Trade Pte Limited
24 JSW Steel Coated Products Limited
25 Amba River Coke Limited
26 JSW Jharkhand Steel Limited
27 JSW Bengal Steel Limited
28 JSW Natural Resources India Limited
29 JSW Energy (Bengal) Limited
30 JSW Natural Resource Bengal Limited
31 Peddar Realty Limited (formerly known as Peddar Realty Private Limited)
32 JSW Realty & Infrastructure Private Limited
33 JSW Industrial Gases Limited (formerly known as JSW Industrial Gases Private Limited)
34 JSW Utkal Steel Limited
35 Piombino Steel Limited
36 Bhushan Power and Steel Limited
37 JSW Vijayanagar Metallics Limited
38 JSW Retail and Distribution Limited
39 Neotrex Steel Limited (formerly known as Neotrex Steel Private Limited)
40 NSL Green Steel Recycling Limited (w.e.f. September 27, 2023)
41 Chandranitya Developers Limited (formerly known as Chandranitya Developers Private Limited)
42 JSW AP Steel Limited (w.e.f. May 19,2023)
43 National Steel & Agro India limited (w.e.f. May 19, 2023)
44 Mivaan Steels Limited (w.e.f July 31, 2023)
45 Monnet Cement Limited (w.e.f. July 31, 2023)
46 JSW Green Steel Limited (w.e.f. February 27, 2024)
47 JSW JFE Electrical Steel Private Limited (Formerly known as JSW Electrical Steel Private Limited) (w.e.f. November 2, 2024 and upto February 7, 2024)
s. No. List of Joint Ventures
i JSW Severfield Structures Limited
2 JSW Structural Metal Decking Limited
3 Rohne Coal Company Private Limited
4 JSW Ml Steel Service Centre Private Limited
5 JSW Ml Chennai Steel Service Centre Private Limited
6 Vijayanagar Minerals Private Limited
7 Gourangdih Coal Limited
8 Creixent Special Steels Limited (upto July 24, 2023)
9 JSW Ispat Special Products Limited (upto July 24, 2023)
10 Ayena Innovation Private Limited
11 JSW One Platforms Limited
12 JSW One Distribution Limited
13 JSW One Finance Limited
14 JSW JFE Electrical Steel Private Limited (Formerly known as JSW Electrical Steel Private Limited) (w.e.f. February 8, 2024)
15 Urtan North Mining Company Limited (w.e.f. July 31, 2023)
16 MP Monnet Mining Company Limited (w.e.f. July 31, 2023)
17 NSL Green Steel Recycling Limited (upto September 22, 2023)
s. No. List of Associates
i JSW Renewable (Vijayanagar) Limited
2 JSW Paints Private Limited (w.e.f. 22 August 2023)
Digitalisation
JSW Steels digital transformation strategy leverages Industry 4.0 technologies to drive improvements across its operations. By integrating advanced digital solutions-from loT sensors in mining to machine learning in manufacturing processes-the Company enhances efficiency, guality, safety, and sustainability. Key initiatives include digital twins for real-time process optimisation, predictive analytics for proactive maintenance, and Al-driven systems for improved decision-making and safety standards. These digital advancements streamline operations and create a culture of innovation and continuous improvement within JSW Steel. The successful implementation of these technologies has set new industry benchmarks, transforming traditional practices and contributing to a more sustainable and efficient future in steel manufacturing.
Human Resources
JSW Steel understands that achieving its goal of becoming a more efficient and superior steel producer hinges on the dedication and skills of its workforce. Talent management is a pivotal part of the Companys strategic framework. Employees benefit from policies designed to cultivate a supportive work environment. In addition to industry-competitive compensation packages, the Company provides extensive learning and career development opportunities. Embracing diversity and inclusion,
JSW Steel fosters a culture where all employees feel valued and empowered. Moreover, by leveraging digitalisation, the Company enhances employee capabilities and operational efficiency. Robust health and safety measures are in place to ensure the well-being of employees, driving them to achieve and maintain peak performance levels.
Corporate Social Responsibility
The Companys commitment to Corporate Social Responsibility is an integral part of its Better Everyday ethos, which is aimed at addressing social inegualities in India by creating opportunities. It also aims to uplift communities through initiatives that drive infrastructural and rural development across the nation. Its CSR initiatives are guided by principles of engaging diverse stakeholders, fostering community involvement at the local level, promoting grassroots participation, and ensuring programmes are scalable, replicable, and sustainable. By adhering to these principles, JSW Steel aims to make a meaningful impact on society while advancing its business objectives.
Risk Management
The ERM framework of JSW Steel provides a structured approach to identify, prioritise, manage, monitor, and report on key and emerging risks. The Company adheres to the globally recognised Committee of Sponsoring Organisations (COSO) framework for ERM, which facilitates the seamless integration of internal controls into its business processes.
JSW Steels risk management approach incorporates both bottom-up and top-down strategies. The bottom-up process involves the identification and regular assessment of risks by its plants and corporate functions, followed by the implementation of effective mitigation strategies. Concurrently, the Companys Risk Management Group
(Senior Leadership Team) and the Risk Management Committee (RMC) adopt a top-down approach to identify and evaluate long-term, strategic, and macro risks to its business.
The RMC, operating as a sub-committee of the Board of Directors, oversees the entire risk management process within the organisation. Chaired by an Independent Director, the RMC ensures that the ERM framework effectively addresses the following critical aspects:
> Prudently taking intended risks to plan for the best and prepare for the worst.
> Executing decided strategies and plans with a focus on action.
> Avoiding, mitigating, transferring (such as through insurance), or sharing (like through subcontracting) unintended risks, such as performance, incident, process, and transaction risks. The probability or impact of these risks is reduced through tactical and executive management, policies, processes, inbuilt system controls, MIS, and internal audit reviews.
JSW Steel recognises that emerging and identified risks must be mitigated to:
> Protect the interests of the Companys shareholders and other stakeholders
> Achieve business objectives
> Enable sustainable growth
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