Script

Akanksha: - Good afternoon everyone, as we gathered here to discuss about 4 different

aspects of the company that are revenue drivers, cost drivers, capex drivers and EIC analysis.
Sure
Sure
Richa: - How about we start with the company's revenue drivers? I have a few things in my
mind, first I have steel production and sales volume. I have read this in annual report that
Vijaynagar Works and Dolbi Works are major raw material producers for the company
similarly every product sales volume is increasing year to year major in tinplate with a 29%
increase followed by Cold rolled close Annealed with 13% further galvanized steel and
colour coated with 12% increase in their revenue. With this steel prices significantly affect
the revenue.
Hmm..
I agree with this.
Shreya: - I have one more revenue driver in my mind: market demand. This market demand
comes from key sector areas such as construction, automotive, infrastructure, and
manufacturing. Economic growth and industrial activities in India and export markets. I read
that domestic sales increased from 19.10 metric tonnes in year 2023 to 20.57 in year 2024.
Akanksha:- I read about the company's product mix, which is diversified into high-margin,
value-added steel products. Introduction of innovative steel solutions tailored to specific
industries. Majorly increased in logs. Secondly, revenue is from domestic sales versus
exports. Expansion into new markets and strengthening presence in existing international
markets. In this I analyzed that there is about 36% growth in export turnover.
What do you think?
I agree.
I agree.
I agree.

Ananya:- I have one more point to add to this, which is a strategic alliance and partnership
Collaborations and joint ventures that enhance the market reach and product offerings. Long-
term supply agreements with key customers.
Some major Indian subsidiaries include: -
1. Amba River Coke Limited (ARCL)
2. Bhushan Power and Steel Limited (BPSL)
3. Neotrex Steel Limited (NSL)
4. JSW Vijayanagar Metallics Limited (JVML)
 5. NSL Green Steel Recycling limited
Major foreign subsidiaries include: -
1. Periama Holdings LLC and its subsidiaries
2. Acero Junction Holding, Inc
Both are US based companies.

Shreya: - Now, lets start with cost drivers of the company I will start with
Raw Material Costs:
Raw materials like iron ore, coking coal, and scrap steel are crucial. The cost of mining
premiums and royalties has risen by 34%, but overall material costs have decreased by 6%.
Companies use long-term contracts and own mines to manage these costs.
Energy Costs:
Energy is a big expense, including electricity and fuel. Steel producers are focusing on energy
efficiency and switching to renewable energy to cut costs.
Ananya: - I want to add to this.
Labor Costs:
Wages and benefits for workers are significant. Investments in training and improving labor
productivity help manage these expenses.
Transportation and Logistics:
Transporting raw materials and finished goods adds to costs. Efficient supply chain
management is key to keeping these expenses in check.
Maintenance and Depreciation:
Regular maintenance of equipment and depreciation of assets are ongoing costs. Keeping
machinery in good shape is essential for smooth operations.
Akanksha: - Further I want to add points to this.
Regulatory and Compliance Costs:
Complying with environmental regulations, including emissions control and waste
management, involves additional costs.
Technology and Innovation:
Investments in research and development for new technologies and processes help improve
efficiency and reduce long-term costs.
Richa: - I also want to add.
Currency Exchange Rates:
Fluctuations in currency exchange rates can impact the cost of imports and revenue from
exports.
Interest and Financing Costs:
Finally, costs related to debt and equity financing, including interest payments, affect overall
expenses.

Shreya:
Let's begin with an overview of the Capex plan. The total planned expenditure of ₹64,434
crore is split between carried-forward commitments of ₹37,094 crore and new approvals
amounting to ₹27,340 crore.
Richa:
The Capex plan is not just about expansion; it also includes significant investments in growth
and mining projects, along with the modernization of the Italy Rail Mill, which has a budget
of ₹4,665 crore. To ensure operational reliability and efficiency, ₹3,550 crore has been
allocated for sustenance Capex.
Ananya:
These strategic investments are designed to support JSW Steel's ambitious growth targets.
JSW Steel is positioning itself to maintain its leadership in the global steel industry by
expanding capacity, modernizing facilities, and investing in sustenance. Additionally, these
investments align with the company's commitment to sustainable development, ensuring
long-term growth while contributing to the environment and community.
Akanksha
A significant portion of 27,340 Cr as mentioned by shreya investment is directed toward the
expansion of the Dolvi Phase-III project, with a dedicated outlay of ₹19,125 crore. The
expansion mentioned by Richa will increase the plant's capacity by an additional 5 million
tonnes per annum (MTPA).It's important to note that approximately 95% of this investment is
focused on strengthening operations in India, while the remaining 5% is allocated for
international projects.

Ananya :- Now, I have read some of the key projects and their timelines which will play an
important role in capex: -
1. 5 MTPA Integrated Steel Plant - Vijayanagar:
o The Hot Strip Mill (HSM) commissioning was successfully completed, with
commercial production and sales beginning in March 2024.
o Full commissioning of the integrated 5 MTPA facility is expected by Q2 FY
2024-25, with optimal production anticipated by Q3 FY 2024-25.
2. Coke Oven Capacity Expansion:
 o A new 1.5 MTPA coke oven capacity has been commissioned, with an
additional 1.5 MTPA capacity set for phased commissioning starting Q2 FY
2024-25.
Do you guys read about some project?
Shreya: - Yes, I have read about,
3. Bhushan Power & Steel Limited (BPSL) Expansion:
o The Phase-II expansion is progressing well, with key milestones like the
commissioning of the Wire Rod Mill-2 and Billet Caster already achieved.
o Full ramp-up to 5 MTPA capacity is expected by the end of Q3 FY 2024-25.
Richa :- I read about
4. Dolvi Phase-III Expansion:
o This project will add 5 MTPA to JSW Steel's capacity, raising the total to 15
MTPA by September 2027.
Akanksha :- I read about
5. Jammu & Kashmir Colour Coating Line:
o The new 0.12 MTPA line is nearing completion, with commissioning expected
in Q2 FY 2024-25.
6. Odisha Slurry Pipeline Project:
o Progress continues on this 30 MTPA project, with commissioning planned for
FY 2026-27
Shreya : - Now lets talk about economic performance in FY 2023-24. Let’s get started!
Richa:
India continues to be the world’s fastest-growing major economy, with a real GDP growth
of 8.2%, up from 7.0% in FY 2022-23. This growth was driven by strong government
spending on infrastructure, robust private consumption, and a thriving manufacturing and
services sector.Manufacturing and construction were the stars, both growing by 9.9%,
thanks to lower input costs and government initiatives. The overall growth in real gross
value added (GVA) was 7.2%. The construction sector also benefited from the
government’s housing projects under PM Awas Yojana.
Ananya:
Total consumption grew by 3%, with rural demand recovering. Gross fixed capital
formation, which makes up 34% of GDP, grew by 10.2%, reflecting strong investments in
infrastructure. This is expected to kickstart further private sector investments.
Akanksha:
The government has set aside a record ₹11.1 lakh crore for capital expenditure in the FY
2024-25 Interim Budget, an 11.1% increase from the previous year. This aligns with its
 focus on driving economic growth through infrastructure.Despite global challenges,
India’s exports slightly increased to USD 776.68 billion. The current account deficit
improved to 0.7% of GDP from 2% in the previous year, thanks to a reduced trade deficit.
Shreya:
Retail inflation moderated to 4.8% in March 2024, still above the RBI’s target of 4%. The
RBI has paused interest rate hikes, focusing on stabilizing prices. Meanwhile, strong tax
collections have supported fiscal consolidation, with the fiscal deficit narrowing to 5.8%.

Ananya: - If we talk about industry analysis we should start with global steel industry. So,
After a period of volatility, global steel demand is expected to stabilize but remain weak over
the next two years. Despite challenges such as geopolitical uncertainties and high inflation,
the global economy has shown resilience. In China, steel demand remains subdued due to a
bleak outlook in the property and construction sectors. In contrast, India's steel industry is
thriving due to its young and growing population, creating significant opportunities for
growth across various sectors.

Shreya: - I will be talking about long products. Rebar/TMT prices fluctuated due to seasonal
factors, supply-demand imbalances, and policy impact. China's steel production rebounded in
January, affecting domestic prices. India's domestic prices were impacted by increased
supply, while US and EU prices remained stable.

Akanksha: - I will talk about flat products. In 2023, hot-rolled coil (HRC) prices were highly
volatile in major markets due to seasonal restocking and supply-demand imbalances. HRC
prices increased in the US and EU, weakened in China due to increased production and
decreased demand, and remained stable in India due to strong domestic demand despite
increased imports.
Richa: - I will talk about raw material cost, the price of 62% grade iron ore varied from
US$95/tonne to US$136/tonne in FY 2023-24. Prices initially rose due to increased steel
production in China, but later stabilized and then declined in mid-2024. Hard coking coal
prices ranged from US$220/tonne to US$375/tonne during the same period due to strong
demand from India, supply constraints, and safety inspections in China. Moving forward,
coking coal prices are expected to remain stable, while iron ore prices may decline due to
potential steel production cuts in China.
Shreya:
India is the second-largest producer of crude steel globally. In FY 2023-24, production rose
by 13.2% to 144.04 million tonnes (MnT), driven by strong domestic demand from
infrastructure, housing, and the automotive sector.
Akanksha:
Finished steel consumption increased by 13.6% to 136.25 MnT. However, steelmakers faced
pressure on margins due to volatile costs and rising low-cost imports, which affected steel
prices.
Ananya:
India became a net importer of steel, with imports rising by 37% to 9.65 MnT, largely from
China. Exports grew slightly by 2.5%, with Europe being the largest buyer of Indian steel.
Richa:
The ongoing infrastructure boom, urbanization, and investments in renewable energy are
driving steel demand. Initiatives like PM Gati Shakti are also set to boost future demand.

Ananya: - If we talk about company analysis,

Export Performance:
In FY 2023-24, JSW Steel's exports grew by 23%, much faster than the industry average of
12%. They now handle 45% of India’s steel exports, with significant increases in high-value
products like coated and CRM steels.
Akanksha: - Green Energy Contributions:
JSW Steel supports India’s green energy goals by supplying steel for wind power and solar
projects. Their steel is used in 65% of new wind towers and saw a 93% growth in solar
product sales.
Shreya : - High-Speed Rail Projects:
JSW Steel is providing essential materials for the Mumbai-Ahmedabad High-Speed Rail and
preparing for the Varanasi-Delhi bullet train, helping advance these major infrastructure
projects.
Richa : - Automotive Sector:
In the automotive industry, JSW Steel’s Advanced High-Strength Steel enhances vehicle
safety and efficiency. They’ve also secured key contracts with brands like Hyundai and Kia
Motors.