JSW Steel Expansion Roadmap

JSW Steel (JSTL) has outlined a structured expansion roadmap targeting a crude steel capacity of approximately 56 million tonnes per annum (MTPA) by FY31, with a focus on achieving 50 MTPA in India excluding the acquisition of Bhushan Power and Steel (BPSL).

The key component of this expansion plan is the 5 MTPA integrated steel plant at Jagatsinghpur in Odisha, which will feature a blast furnace (BF), steel melting shop (SMS), and hot strip mill (HSM) with a power capacity of approximately 350 MW. The coastal location of the plant, along with its port connectivity and slurry pipeline, ensures efficient logistics.

The expansion plan includes:

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• Phase-II scalability to 13.2 MTPA embedded upfront, reducing future capital expenditure intensity.
• 5 MTPA JVML facility fully ramped up, with the BF-3 upgrade expected to add 1.5 MTPA by 4QFY26, supporting incremental volumes from FY27 onward.
• Dolvi facility expansion from 10 MTPA to 15 MTPA, with estimated capital expenditure of approximately INR210 billion and completion expected by Sep'27.
• 1 MTPA Electric Arc Furnace (EAF) at Kadapa, with estimated capital expenditure of INR38 billion and commissioning expected by FY29.

Outlook

At the current market price (CMP), JSTL trades at 7.6x FY28E EV/EBITDA. We reiterate our BUY rating on the stock with a target price of INR1,400, premised on a valuation multiple of 9x EV/EBITDA on our estimate for Sep'27.