Return of govt capex to aid steel demand: JSW Steel’s Acharya | Company Business News

JSW Steel expects steel demand to rise as New Delhi’s expenditure returns to normalcy in the last fiscal quarter after a slowdown through the year due to elections and formation of a new government.
Demand for steel in the first nine months of the current fiscal year saw a good growth despite low capital expenditure (capex), said Jayant Acharya, joint managing director of JSW Steel, adding that this sets the stage for ‘good’ growth in the medium term.
“We have seen a very strong domestic (steel demand) growth in spite of a lower capex in April to November. Post the elections, which are now behind us, and weather disruptions, the capex would improve back-ended in this financial year, so that should again play into a strong fourth quarter,” he told Mint during a post-earnings interview.
JSW Steel, India’s largest steelmaker by capacity, reported a 1% year-on-year dip in its consolidated revenue to ₹41,378 crore for the October-December quarter. Consolidated profit fell more than two-thirds from a year ago to ₹719 crore. Earnings before interest, tax, depreciation and amortization fell 22% to ₹5,579 crore.
Capex impact
Between April and November 2024, government capex stood at ₹5.13 trillion, which was just under half of the budget allocation of ₹11.11 trillion for fiscal 2024-25.
“We are expecting the government to push growth and capex both, which will be positive for India at large. We remain optimistic on India in the medium-to-long term despite whatever aberrations there are on trade measures and mining,” he said.
By aberrations, Acharya was referring to the surge of steel imports into India over the past year. India’s inbound steel shipments grew 22% in 2024 to 9.2 million tonnes, led by a surge in imports from China and Japan, as per data from BigMint, a market intelligence firm.
While the imports represent a small fraction of India’s annual steel consumption of about 150 million tonnes, inexpensive imports are disrupting the prices of domestic steel mills that claim that the current price levels cannot sustain continued investment in capacity expansion. Large domestic steelmakers have made a unanimous demand to New Delhi to put a curb on rising steel imports.
The other aberration that Acharya was referring to was the recent Supreme Court ruling that states have the legislative authority to impose taxes on mining in addition to the royalty levied by the Centre. The ruling has put the metals and mining industry in limbo as retrospective applicability of the judgement puts tall liabilities on mining companies, which is expected to trickle down as additional costs upon the entire industry.
In fact, a key demand of steelmakers from the government in the upcoming budget was “to give clarity on mining regulations and challenges which are still remaining in that area,” Acharya said.
Speaking about the expectations of the steel industry from the upcoming Union budget, Acharya said that steelmakers seek continued “focus on government capex, which has a large economic multiplier.”
“Second is, spurring consumption so that the private capex comes back in a better way,” he said.
JSW Steel expects to end this year with a manufacturing capacity of 34.2 million tonnes a year amidst its capacity expansion push. That would take its global manufacturing capacity to 35.7 million tonnes a year, including facitlities in the US and Italy.
By September 2027, the company expects to reach 42 million tonnes of annual steelmaking capacity in India. It aims to exceed 50 million tonnes a year by the turn of the decade.
The Indian government is aiming for a domestic manufacturing capacity of 300 million tonnes of steel a year by 2030-31, up from 180 million tonnes at the end of FY24.
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