JSW Steel Raises Capacity Target to 56 mtpa by FY31, Plans ₹1 Trillion Investment
JSW Steel has raised its capacity expansion target to 56 mtpa by FY31, exceeding previous guidance of 50 mtpa, with plans to invest ₹1 trillion over four to five years. The company reported strong Q3 results with net profit of ₹2,139 crore, up from ₹717 crore year-on-year, and revenue growth of 11% to ₹45,991 crore. JSW Steel is strengthening raw material security, targeting 50% captive iron ore sourcing and 25% coking coal sourcing by FY31, while navigating regulatory scrutiny over alleged price collusion in the steel sector.
*this image is generated using AI for illustrative purposes only.
JSW Steel , India's largest steelmaker by capacity, has accelerated its expansion plans with a revised target of 56 million tonnes per annum (mtpa) by FY31, surpassing its earlier guidance of 50 mtpa. The enhanced target reflects the company's confidence as it emerges from a period of weak steel prices and margin pressure while strengthening efforts to secure raw materials and capitalize on early signs of demand recovery.
Revised Expansion Strategy
The 56 mtpa target excludes the company's recently established joint venture with Japan's JFE Steel Corp., under which JSW Steel sold half its stake in subsidiary Bhushan Power and Steel Ltd (BPSL). Joint Managing Director and CEO Jayant Acharya explained that including BPSL, the company was likely to exceed 60 mtpa by FY31.
| Capacity Breakdown by FY31: | Details |
|---|---|
| Total Target Capacity: | 56 mtpa |
| India Operations: | 54.5 mtpa |
| US Operations: | 1.5 mtpa |
| Current Total Capacity: | 35.7 mtpa |
| BPSL Potential Expansion: | 4.5 mtpa to 10 mtpa |
The management sees additional upside from BPSL, where capacity could potentially expand to 10 million tonnes from the current 4.5 million tonnes, although this will be pursued independently by the joint venture partners.
Investment Plans and Industry Context
JSW Steel has charted a comprehensive plan to invest ₹1 trillion over the next four to five years for capacity expansion. The investment will be front-loaded, with higher spending in the initial years before gradually tapering down. The company will provide a detailed year-wise breakdown during its annual and fourth quarter results in May.
The Indian steel industry is witnessing significant expansion, with major players collectively adding substantial capacity:
| Company: | Current Capacity (mtpa) | Target Capacity (mtpa) | Addition (mtpa) |
|---|---|---|---|
| JSW Steel: | 35.7 | 56.0 | 20.3 |
| Tata Steel: | 26.6 | 40.0 | 13.4 |
| SAIL: | 21.0 | 35.0 | 14.0 |
| AMNS India: | 9.0 | 25.0 | 16.0 |
| Total Industry Addition: | 63.7 |
Raw Material Security Initiative
Alongside capacity growth, JSW Steel is intensifying efforts to secure raw materials. The company expects to meet around 50% of its iron ore requirement from captive mines by FY31, supported by 23 operating mines across multiple states. For coking coal, the company is targeting 25% captive sourcing, which could increase to 33-35% upon completion of a potential coking coal mine acquisition in Mozambique.
Strong Q3 Financial Performance
JSW Steel delivered robust financial results for the quarter ended December 31, 2025, demonstrating operational resilience amid challenging market conditions.
| Financial Metric: | Q3 FY25 | Q3 FY24 | Growth |
|---|---|---|---|
| Net Profit: | ₹2,139 crore | ₹717 crore | +198% |
| Revenue from Operations: | ₹45,991 crore | ₹41,433 crore* | +11% |
| Adjusted EBITDA: | ₹6,620 crore | ₹5,426 crore* | +22% |
| EBITDA Margin: | 14.4% | - | - |
*Calculated based on growth percentages provided
The quarterly profit significantly exceeded the ₹1,406.70 crore consensus estimate of 13 analysts polled by Bloomberg. However, the results included one-time items: a deferred tax asset recognition of ₹1,439 crore linked to BPSL and an exceptional employee-related provision of ₹529 crore arising from changes in labour codes.
Market Outlook and Pricing Dynamics
After experiencing multi-year low steel prices and higher input costs that weighed on earnings, Acharya indicated signs of recovery in the current quarter. The CEO expects prices to reach more reasonable levels during this quarter, supported by rupee depreciation and improvement in domestic demand.
The company anticipates an impact of $15-20 per tonne from higher coking coal prices in the current quarter, which it expects to mitigate through pricing and cost measures. Excluding one-time items, profitability was lower sequentially due to weaker realisations and higher coal costs, although value-added products helped cushion the impact.
Regulatory Compliance
Regarding allegations of price collusion reported in the media, Acharya stated he does not see merit in the case and emphasized JSW Steel's compliance with competition laws. He noted that the TMT market in question is highly price-sensitive and dominated by secondary players. India's competition watchdog reportedly found that market leaders including JSW Steel, Tata Steel, SAIL and 25 other firms colluded on steel selling prices, potentially exposing companies and executives to significant fines.
Historical Stock Returns for JSW Steel
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.22% | -1.00% | +6.86% | +13.52% | +27.26% | +211.67% |
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