Jindal Steel margin drops 8.92 points as costs rise despite higher sales
Revenue grew 25.93% YoY, but expenses grew faster and interest expense rose 84.83%, while the margin also fell sharply from Q4FY26.
Filed 24 Jul 2026, 18:08 IST · after market close · Jindal Steel Ltd (JINDALSTEL)
Key takeaways
- Consolidated operating margin fell 8.92 percentage points quarter on quarter to 10.50% as expenses grew 6.04% while revenue declined 4.54%.
- Net profit declined 43.60% year on year to Rs 843.80 cr as interest costs rose 84.83% and the tax rate increased 4.08 percentage points.
- Jindal Steel's 10.50% operating margin was 3.06 percentage points below the 13.56% median of 12 reported Commodities peers.
Price around the results
Revenue momentum reversed after the Q4FY26 rebound
Consolidated revenue declined 4.54% quarter on quarter, while expenses rose 6.04%, cutting operating profit 48.40%. Year on year, revenue was still up 25.93%, but expenses grew faster at 34.84%, leaving operating profit down 19.46%. Management said the Angul expansion to 12 MT has been completed and that dispatches have started from the Utkal B1 mines.
Higher costs and financing charges compressed profitability
Operating margin narrowed 8.92 percentage points sequentially and 5.91 percentage points year on year because costs grew faster than revenue in both comparisons. Interest expense rose 23.94% quarter on quarter and 84.83% year on year, while depreciation increased 7.50% and 28.40%, respectively. Other income contributed only 1.59% of pre-tax profit, so reported earnings were not materially supported by non-operating income.
Profit fell despite a higher sequential pre-tax result
Pre-tax profit rose 11.11% sequentially, but net profit fell 18.96% as the tax rate increased 26.91 percentage points to 29.94%; the comparison is against an unusually low 3.03% tax rate in Q4FY26. The margin path has been volatile: it fell from 16.41% in Q1FY26 to 6.78% in Q3FY26, rebounded to 19.42% in Q4FY26, and then declined to 10.50% this quarter. The company was also below the 13.56% median operating margin among 12 reporting Commodities peers.
Management flags demand uncertainty alongside balance-sheet targets
Management said India is expected to drive global steel-demand growth despite weakness in China. The presentation said finished steel imports rose 10% quarter on quarter and 49% year on year to 2.1 MT, with India remaining a net importer for two consecutive quarters. Management said it aims to maintain INR 2,000 cr of liquidity and target net debt to EBITDA below 1.5x through the cycle.
No immediate market reaction after the post-close filing
The results were filed after market close, so there was no reported market reaction at the time of this note. After the previous eight results, the stock rose three times and fell five times, with a median absolute move of 0.61%; the historical response has therefore usually been limited, despite two larger moves of 3.13% and -5.77% in the recorded history.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹15,482 cr | ₹16,218 cr | -4.54% | +25.93% |
| Other income | ₹19 cr | ₹266 cr | -92.80% | -36.87% |
| Expenses | ₹13,857 cr | ₹13,068 cr | +6.04% | +34.84% |
| Operating profit | ₹1,625 cr | ₹3,150 cr | -48.40% | -19.46% |
| Operating margin (%) | 10.50% | 19.42% | — | — |
| Interest | ₹548 cr | ₹442 cr | +23.94% | +84.83% |
| Depreciation | ₹926 cr | ₹862 cr | +7.50% | +28.40% |
| Profit before tax | ₹1,205 cr | ₹1,085 cr | +11.11% | -40.29% |
| Tax | ₹361 cr | ₹33 cr | +996.26% | -30.87% |
| Net profit | ₹844 cr | ₹1,041 cr | -18.96% | -43.60% |
| EPS (₹) | ₹8.30 | ₹10.27 | -19.18% | -43.65% |
Operating margin of 10.50% compares with a Commodities sector median of 13.56% across 12 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- India is expected to drive global steel demand growth despite weakness in China.
- The company aims to maintain INR 2,000 crore of liquidity.
- The company targets net debt to EBITDA below 1.5x through the cycle.
Expansion
- The Angul expansion to 12 MT has been completed.
- Dispatch has started from the Utkal B1 mines.
New initiatives
- AI agents are going live across people, processes and plants.
- JARVIS is being used as a personal AI assistant across the organisation.
- The company is experimenting with humanoids.
- The company is collaborating with IIT Bombay and the Ministry of Steel on electrochemical CO2-to-CO conversion.
Problems & risks
- China is cited as a source of weakness in the global steel demand outlook.
- Finished steel imports rose 10% quarter on quarter and 49% year on year to 2.1 MT in Q1FY27.
- India remained a net importer in Q1FY27 for two consecutive quarters.
What to watch
- Whether operating margin recovers from 10.50% after the 8.92-percentage-point sequential decline.
- Whether interest expense moderates from Rs 548.21 cr after rising 84.83% year on year.
- Whether finished steel imports move from 2.1 MT after rising 10% quarter on quarter and 49% year on year.