Faster costs and interest diluted Jindal Steel's profit growth
Consolidated sales rose +42.72% YoY, while operating margin fell 2.39 percentage points and net profit growth slowed to +21.35%.
Filed 23 Oct 2026, 15:14 IST · Jindal Steel Ltd (JINDALSTEL)
Key takeaways
- Consolidated revenue grew +42.72% YoY to Rs 16,678.54 cr, but expenses grew faster at +46.87%, cutting operating margin by 2.39 percentage points.
- Net profit rose only +21.35% YoY as interest expense jumped +52.51%, despite the tax rate falling 6.46 percentage points.
- Q2FY27 operating margin of 15.42% was 0.55 percentage points below the 15.97% median of 11 reported Commodities peers.
Price around the results
Revenue grew sharply, but earnings conversion weakened
Consolidated revenue rose +42.72% YoY and +7.73% QoQ, but operating profit grew only +23.60% YoY and fell -3.31% QoQ. The gap reflects weaker operating conversion as costs expanded faster than sales. Other income contributed just 2.23% of pre-tax profit, so it was not a material support to reported earnings.
Higher costs and financing burden compressed margins
Expenses increased +46.87% YoY against revenue growth of +42.72%, reducing operating margin by 2.39 percentage points; sequentially, expenses rose +10.02% while revenue rose +7.73%, cutting margin by 1.76 percentage points. Interest expense rose +52.51% YoY and +3.29% QoQ, while depreciation increased +26.30% YoY. The lower tax rate, down 6.46 percentage points YoY, cushioned net profit but did not offset the operating and financing pressure.
Margin has fallen for two straight quarters after Q4FY26
Operating margin declined from 18.12% in Q4FY26 to 17.18% in Q1FY27 and 15.42% in Q2FY27. The latest margin was 0.55 percentage points below the 15.97% median for 11 Commodities peers that had reported the quarter, placing Jindal Steel fifth from the bottom on this measure. Management said the company continues to invest in the Angul expansion, while an 18 MTPA iron ore slurry pipeline and the 5.5 MTPA Utkal B1 facility were commissioned in Q2FY27.
Management set out capital and balance-sheet targets
Management said it targets annual capex of Rs 7,500-10,000 cr, project pre-tax ROCE of 18-20%, and liquidity of Rs 3,000 cr. It also said net debt to EBITDA is targeted below 1.5x through the cycle. The presentation said India is expected to lead global steel-demand growth through CY27, and highlighted a strategic partnership with IIT Hyderabad for a Centre of Excellence.
No post-results share-price move is available yet
After the last eight results, the stock rose three times and fell five times, with a median absolute move of 0.61%. The current results do not yet have a reported post-results market reaction, so there is no move to compare with that history.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹16,679 cr | ₹15,482 cr | +7.73% | +42.72% |
| Other income | ₹24 cr | ₹19 cr | +28.39% | +10.17% |
| Expenses | ₹14,106 cr | ₹12,822 cr | +10.02% | +46.87% |
| Operating profit | ₹2,572 cr | ₹2,660 cr | -3.31% | +23.60% |
| Operating margin (%) | 15.42% | 17.18% | — | — |
| Interest | ₹566 cr | ₹548 cr | +3.29% | +52.51% |
| Depreciation | ₹947 cr | ₹926 cr | +2.19% | +26.30% |
| Profit before tax | ₹1,084 cr | ₹1,205 cr | -10.05% | +10.31% |
| Tax | ₹313 cr | ₹361 cr | -13.27% | -9.87% |
| Net profit | ₹771 cr | ₹844 cr | -8.67% | +21.35% |
| EPS (₹) | ₹7.61 | ₹8.30 | -8.31% | +21.18% |
Operating margin of 15.42% compares with a Commodities sector median of 15.97% across 11 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company targets annual capex of INR 7,500-10,000 crore.
- The company targets a project pre-tax ROCE of 18-20%.
- The company targets maintaining INR 3,000 crore of liquidity.
- The company targets net debt to EBITDA below 1.5x through the cycle.
- India is expected to lead growth in global steel demand through CY27.
Expansion
- The company continues to invest in the Angul expansion.
- An 18 MTPA iron ore slurry pipeline was commissioned in Q2FY27.
- Utkal B1, with 5.5 MTPA capacity, was commissioned.
New initiatives
- The company formed a strategic partnership with IIT Hyderabad to establish a Centre of Excellence.
- JARVIS provides a governed platform for Jindal data, workflows and AI agents.
What to watch
- Whether operating margin moves back above 15.42% after two consecutive quarterly declines.
- Whether interest expense falls below Rs 566.22 cr or continues to rise from the Q2FY27 level.
- Progress against management's reported annual capex target of Rs 7,500-10,000 cr and liquidity target of Rs 3,000 cr.