Jindal Steel margin rebounds, but tax and other income cloud profit quality
Consolidated operating margin recovered 5.58 percentage points QoQ as costs lagged revenue growth, while the initial stock gain was far above its usual results-day move.
Filed 01 May 2026, 19:38 IST · after market close · Jindal Steel Ltd (JINDALSTEL)
Key takeaways
- Consolidated operating profit rose +79.90% QoQ as revenue grew +24.50% while expenses grew +16.55%, lifting operating margin by 5.58 percentage points.
- Net profit rose to Rs 1,041.24 cr from a loss of Rs -303.59 cr YoY, but the 3.06% tax rate and negative other income equal to -52.21% of pre-tax profit affected the quality of the increase.
- The stock gained +3.13% on the results session, well above its 0.61% median absolute move after the past eight results.
Price around the results
Revenue growth outpaced costs in Q4FY26
Consolidated revenue grew +23.02% YoY and operating profit rose +29.43%, as expenses increased +21.69%; this lifted operating margin by 0.90 percentage points. The QoQ recovery was sharper: revenue rose +24.50% while expenses grew +16.55%, adding 5.58 percentage points to operating margin. At 18.12%, the margin was 0.65 percentage points below the 18.77% median for the 51 Commodities peers that had reported.
Low tax rate boosted a profit rebound despite income drag
Profit before tax rose to Rs 1,074.15 cr from Rs 71.81 cr YoY, while net profit moved from Rs -303.59 cr to Rs 1,041.24 cr. The tax rate fell 41.29 percentage points QoQ to 3.06%, which supported the net-profit increase. Other income was negative at Rs -560.83 cr and represented -52.21% of pre-tax profit, while interest rose +29.50% YoY and depreciation increased +24.79%.
Q4 breaks the margin slide from Q1 to Q3
Operating margin declined from 24.45% in Q1FY26 to 17.81% in Q2FY26 and 12.54% in Q3FY26 before recovering to 18.12% in Q4FY26. The sequential rebound therefore reverses the previous three-quarter deterioration, but leaves the margin below the Q1 level. Year-on-year improvement was more modest at 0.90 percentage points.
New furnaces are now commissioned, with FY27 targets set
Management said BF2 and BOF2 were commissioned in September 2025 and BOF3 in March 2026, while DRI2 and Pellet Plant 2 remain under construction. The company said it is aiming for FY27 steel production of 11.0–11.5 MT and sales of 10.5–11.0 MT. Management also said it targets net debt to EBITDA below 1.5x through the cycle and is pursuing syngas use at its Angul DRI facility as part of its decarbonisation programme.
The initial market response was unusually positive
The stock gained +3.13% on the results session, with a +2.62% relative return and volume at 2.62 times the reference level. That was well above the +0.61% median absolute move across the past eight results, during which the stock rose three times and fell five times. The gain was +0.73% by day five, followed by -0.88% at day 15 and -6.81% at day 30.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹16,218 cr | ₹13,027 cr | +24.50% | +23.02% |
| Other income | ₹-561 cr | ₹-50 cr | -1027.30% | +51.93% |
| Expenses | ₹13,279 cr | ₹11,393 cr | +16.55% | +21.69% |
| Operating profit | ₹2,939 cr | ₹1,634 cr | +79.90% | +29.43% |
| Operating margin (%) | 18.12% | 12.54% | — | — |
| Interest | ₹442 cr | ₹406 cr | +8.82% | +29.50% |
| Depreciation | ₹862 cr | ₹839 cr | +2.76% | +24.79% |
| Profit before tax | ₹1,074 cr | ₹339 cr | +216.98% | +1395.82% |
| Tax | ₹33 cr | ₹150 cr | -78.10% | -91.23% |
| Net profit | ₹1,041 cr | ₹189 cr | +452.15% | — |
| EPS (₹) | ₹10.27 | ₹1.87 | +449.20% | — |
Operating margin of 18.12% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.13% | +2.62% |
| Next session | +3.12% | — |
| 5 sessions | +0.73% | +1.48% |
| 15 sessions | -0.88% | — |
| 30 sessions | -6.81% | — |
Volume on the results session was 2.62× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Jindal Steel aims to produce 11.0–11.5 MT and sell 10.5–11.0 MT of steel in FY27.
- The company targets net debt to EBITDA below 1.5x through the cycle.
- Jindal Steel is committed to achieving net zero carbon emissions by 2047.
- Steel consumption in developed economies is expected to rise and offset degrowth in China.
Expansion
- BF2, BOF2 and BOF3 were commissioned between September 2025 and March 2026.
- DRI2 and Pellet Plant 2 are under construction.
New initiatives
- The company has established syngas use at its Angul DRI facility as part of its decarbonisation programme.
- Jindal Steel is executing a programme to reduce CO2 emissions per tonne of crude steel.
- The company has launched the ESG IT Platform called Credibl.
What to watch
- Whether operating margin holds above 18.12% after the Q4FY26 recovery.
- FY27 steel production and sales against management's 11.0–11.5 MT and 10.5–11.0 MT aims.
- Whether net debt to EBITDA remains below management's 1.5x through-cycle target.