Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>JSW Steel has guided for 10% volume growth in FY26, with operating leverage and cost efficiencies poised to drive significant margin expansion.</li>
<li>The Supreme Court ruling on BPSL has created new challenges, the issue is not expected to derail JSW’s growth trajectory or cash flows and production.</li>
<li>Earnings could surge over 85% in FY26, supported by higher steel prices, lower input costs, and ramp-up of new capacities like JVML and Dolvi.</li>
</ul>


JSW Steel has guided for 10% volume growth in FY26, with operating leverage and cost efficiencies poised to drive significant margin expansion.
The Supreme Court ruling on BPSL has created new challenges, the issue is not expected to derail JSW’s growth trajectory or cash flows and production.
Earnings could surge over 85% in FY26, supported by higher steel prices, lower input costs, and ramp-up of new capacities like JVML and Dolvi.


JSW Steel: Positioned for a Sharp Earnings Rebound in FY26 Despite BPSL Overhang

<ul>
<li>BPSL JV gives JFE a scalable India platform, shifting long-term growth away from a stagnant Japan market.</li>
<li>Balance-Sheet impact is manageable, with optional liquidity from the ¥500 bn JSW stake.</li>
<li>Valuation deeply discounted at 0.5× P/B and US$525/t despite rising mix, India optionality, and multi-year earnings normalization.</li>
</ul>


BPSL JV gives JFE a scalable India platform, shifting long-term growth away from a stagnant Japan market.
Balance-Sheet impact is manageable, with optional liquidity from the ¥500 bn JSW stake.
Valuation deeply discounted at 0.5× P/B and US$525/t despite rising mix, India optionality, and multi-year earnings normalization.


JFE Holdings: India JV Resets Long-Term Growth Path; Deep Value with Structural Upside

<ul>
<li>Supreme Court reinstated strict NCLT terms on May 2, 2025, requiring JSW to fully comply or risk BPSL liquidation; NCLAT relaxations were overturned.</li>
<li>BPSL contributes ~12% of JSW’s capacity and ~10% of EBITDA, with strong operational synergy potential, strategic location, and upcoming captive iron ore integration.</li>
<li>While management is yet to formally decide, JSW is likely to comply; the ~6% correction offers a strong long-term opportunity as BPSL integration strengthens margins.</li>
</ul>


Supreme Court reinstated strict NCLT terms on May 2, 2025, requiring JSW to fully comply or risk BPSL liquidation; NCLAT relaxations were overturned.
BPSL contributes ~12% of JSW’s capacity and ~10% of EBITDA, with strong operational synergy potential, strategic location, and upcoming captive iron ore integration.
While management is yet to formally decide, JSW is likely to comply; the ~6% correction offers a strong long-term opportunity as BPSL integration strengthens margins.


JSW Steel–BPSL Acquisition: Court Verdict, Strategic Importance, and Investment Implications

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Beat the Street

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Forensic Accounting

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jsw-steel-ltd" target="_blank" data-smartkarma-citation="entities:18561:1" rel="noopener">JSW Steel Ltd (JSTL IN)</a>'s resolution plan for Bhushan Power &amp; Steel was rejected by the Supreme Court, ordering its liquidation.</li>
<li>The rejection undermines JSW Steel's capacity expansion and investment plans, leading to significant financial and strategic setbacks.</li>
<li>The ruling highlights the importance of strict adherence to IBC provisions and raises concerns over the predictability of large asset resolutions.</li>
</ul>



JSW Steel Ltd (JSTL IN)'s resolution plan for Bhushan Power &amp; Steel was rejected by the Supreme Court, ordering its liquidation.
The rejection undermines JSW Steel's capacity expansion and investment plans, leading to significant financial and strategic setbacks.
The ruling highlights the importance of strict adherence to IBC provisions and raises concerns over the predictability of large asset resolutions.


JSW Steel's Tumble: Untangling the Bhushan Power & Steel Supreme Court Setback

<ul>
<li>JSW Steel has grown its domestic steelmaking capacity at CAGR of 14% over the last 2 decades (2x industry) and at 25% lower costs</li>
<li>Gradual capacity ramp-up at recently completed expansion at Vijayanagar (5m) and actively pursuing 10-15mt of new capacity additions over the next 3-5 years</li>
<li>Valuations: JSW Steel trades at premium to its 5yr average EV/EBITDA likely due to a) impending imposition of a 12% safeguard duty b) superior capital allocation etc.</li>
</ul>


JSW Steel has grown its domestic steelmaking capacity at CAGR of 14% over the last 2 decades (2x industry) and at 25% lower costs
Gradual capacity ramp-up at recently completed expansion at Vijayanagar (5m) and actively pursuing 10-15mt of new capacity additions over the next 3-5 years
Valuations: JSW Steel trades at premium to its 5yr average EV/EBITDA likely due to a) impending imposition of a 12% safeguard duty b) superior capital allocation etc.


JSW Steel: Low Cost Capacity Expansion Underpin Premium Valuations

India

JSW Steel Limited is an integrated steel producer with manufacturing facilities in Karnataka, Tamil Nadu and the western state of Maharashtra. The Company produces products including hot rolled coils, cold rolled coils, wire rods, galvanized coils and sheets.

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JSW Steel Ltd (JSTL IN)

JSW Steel: Positioned for a Sharp Earnings Rebound in FY26 Despite BPSL Overhang

JSW Steel expects 10% volume growth in FY26, despite challenges from BPSL ruling, with potential for significant margin expansion and 85% earnings...

Rahul Jain

JFE Holdings: India JV Resets Long-Term Growth Path; Deep Value with Structural Upside

BPSL JV provides JFE with growth in India, diversifying from slow Japanese market, with manageable balance-sheet impact and discounted valuation.

Rahul Jain

JSW Steel–BPSL Acquisition: Court Verdict, Strategic Importance, and Investment Implications

Supreme Court reinstates strict NCLT terms for JSW, risking BPSL liquidation; JSW likely to comply for long-term opportunity as BPSL integration...

Rahul Jain

JSW Steel's Tumble: Untangling the Bhushan Power & Steel Supreme Court Setback

JSW Steel's resolution plan for Bhushan Power & Steel rejected by Supreme Court, leading to financial setbacks and raising concerns over IBC...

Nimish Maheshwari

JSW Steel: Low Cost Capacity Expansion Underpin Premium Valuations

JSW Steel has significantly increased its steelmaking capacity in India, with plans for further expansion in the next few years, leading to...

Rahul Jain

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JSW Steel: Positioned for a Sharp Earnings Rebound in FY26 Despite BPSL Overhang

​JSW Steel expects 10% volume growth in FY26, despite challenges from BPSL ruling, with potential for significant margin expansion and 85% earnings...

Rahul Jain

JFE Holdings: India JV Resets Long-Term Growth Path; Deep Value with Structural Upside

​BPSL JV provides JFE with growth in India, diversifying from slow Japanese market, with manageable balance-sheet impact and discounted valuation.

Rahul Jain

JSW Steel–BPSL Acquisition: Court Verdict, Strategic Importance, and Investment Implications

​Supreme Court reinstates strict NCLT terms for JSW, risking BPSL liquidation; JSW likely to comply for long-term opportunity as BPSL integration...

Rahul Jain

JSW Steel's Tumble: Untangling the Bhushan Power & Steel Supreme Court Setback

​JSW Steel's resolution plan for Bhushan Power & Steel rejected by Supreme Court, leading to financial setbacks and raising concerns over IBC...

Nimish Maheshwari

JSW Steel: Low Cost Capacity Expansion Underpin Premium Valuations

​JSW Steel has significantly increased its steelmaking capacity in India, with plans for further expansion in the next few years, leading to...

Rahul Jain

JSW Steel expects 10% volume growth in FY26, despite challenges from BPSL ruling, with potential for significant margin expansion and 85% earnings...

BPSL JV provides JFE with growth in India, diversifying from slow Japanese market, with manageable balance-sheet impact and discounted valuation.

Supreme Court reinstates strict NCLT terms for JSW, risking BPSL liquidation; JSW likely to comply for long-term opportunity as BPSL integration...

JSW Steel's resolution plan for Bhushan Power & Steel rejected by Supreme Court, leading to financial setbacks and raising concerns over IBC...

JSW Steel has significantly increased its steelmaking capacity in India, with plans for further expansion in the next few years, leading to...