💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 1.11% YoY to INR 5,999.73 Cr in FY25. H1 FY26 revenue showed a significant 28.6% YoY increase to INR 3,430 Cr, driven by the recovery from the previous year's 84-day blast furnace shutdown.

Profitability Margins

Net Profit Margin reduced from 3.54% in FY24 to 1.88% in FY25 due to lower sales of rolled products and higher finance costs. However, H1 FY26 TCI margin improved to 5.77% from a negative 2.55% in H1 FY25.

EBITDA Margin

EBIDTA margin was 15.90% in FY25, down from 17.62% in FY24. H1 FY26 EBIDTA margin improved to 18.95% (up from 12.79% YoY) as operational efficiency returned post-shutdown.

Capital Expenditure

The company undertook capital repairs and upgradation of its Blast Furnace (BF) and related facilities for 84 days starting May 2024. Investing cash outflow was INR 236 Cr in FY25 and INR 58 Cr in H1 FY26.

Credit Rating & Borrowing

Borrowing costs are high, with NCDs carrying a 14.50% scheduled coupon plus a 3.00% additional coupon (17.5% total). Finance costs rose 19.83% to INR 562.38 Cr in FY25.

⚙️ Operational Drivers

Raw Materials

Iron Ore (100% captive), Coal, and Steel Scrap. Iron ore is sourced from captive mines with a 7 MnTPA capacity, ensuring self-sufficiency.

Import Sources

Primarily sourced from captive mines in India to maintain cost advantages and supply security.

Key Suppliers

Self-supplied iron ore from captive mines; other vendors not specifically named.

Capacity Expansion

Iron ore mining capacity is 7 MnTPA. The company is focusing on debottlenecking existing facilities and implementing cost reduction schemes rather than greenfield expansion.

Raw Material Costs

Cost of Goods Sold (COGS) increased 7.90% YoY to INR 2,609 Cr in FY25, outpacing revenue growth due to lower production volumes during the 84-day BF shutdown.

Manufacturing Efficiency

Manufacturing was impacted by an 84-day BF shutdown in FY25. Efficiency recovered in H1 FY26, with Rolled Product output jumping 74.4% YoY to 1,72,182 MT.

📈 Strategic Growth

Expected Growth Rate

28.60%

Growth Strategy

Growth will be achieved by refinancing INR 1,800 Cr of high-cost debt (currently at 17.5%) to reduce interest burden, debottlenecking facilities to reach 7 MnTPA mining capacity, and shifting the product mix toward high-value steel grades for the automotive and defense sectors.

Products & Services

Alloy steel wire rods, bars, bright bars, steel billets, pig iron, sponge iron (DRI), pellets, and iron & steel castings (including pipe fittings and manhole covers).

Brand Portfolio

NECO Group.

New Products/Services

Development of high-value steel grades for entry into new sectors like defense and aerospace; specific revenue contribution % not disclosed.

Market Expansion

Targeting expansion in automotive, engineering, defense, and infrastructure sectors through OEM approvals.

Strategic Alliances

Maa Usha Urja Private Limited (Associate Company).

🌍 External Factors

Industry Trends

The industry is shifting toward high-value specialized steel and stringent ESG compliance. JNIL is positioning itself through 'zero-waste mining' and 'Viksit Bharat' alignment.

Competitive Landscape

Intense competition from both large integrated steel players and cheaper imports, exerting pressure on commodity-grade steel margins.

Competitive Moat

Moat is built on 100% captive iron ore mines (7 MnTPA), providing a durable cost advantage over non-integrated competitors. This is sustainable as long as mining leases remain valid.

Macro Economic Sensitivity

Highly sensitive to global steel cycles and domestic infrastructure spending. Inflationary pressures on non-captive inputs affect margins.

Consumer Behavior

Increasing demand for high-quality, specialized alloy steels from automotive OEMs and the defense sector.

Geopolitical Risks

Global geopolitical instability affects supply chains and contributes to the dumping of cheaper steel imports into the Indian market.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental norms, mining regulations, and pollution control standards. Refinancing is subject to SEBI Listing Regulations.

Environmental Compliance

CSR expenditure was INR 17.15 Cr in FY25. Future ESG mandates are identified as a threat requiring substantial technology investment.

Taxation Policy Impact

Effective tax rate was negative in FY25 (INR 9.48 Cr credit) compared to an INR 81.06 Cr expense in FY24.

⚠️ Risk Analysis

Key Uncertainties

High financial leverage and interest burden (INR 562 Cr finance cost) are the primary risks. Operational risks include potential unplanned furnace shutdowns.

Geographic Concentration Risk

Operations are concentrated in India, particularly around mining and manufacturing hubs in Maharashtra and Chhattisgarh.

Third Party Dependencies

Low dependency for iron ore due to captive mines; higher dependency on external suppliers for coal and specialized technology.

Technology Obsolescence Risk

Identified threat of inability to adopt and scale new technologies, which could affect long-term competitiveness.

Credit & Counterparty Risk

Not disclosed; however, the company maintains long-term relationships with major OEMs.