JSW Steel vs Tata Steel Q3 FY26

JSW Steel reported a strong operational quarter with consolidated revenue of INR 45,991 crore and adjusted EBITDA of INR 6,620 crore (margin 14.4%). PAT surged to INR 2,410 crore, boosted by deferred tax asset recognition. Domestic sales grew 10% YoY, with value-added products at a record 61% of mix. The company announced a 5 MTPA greenfield plant in Odisha (INR 31,600 crore capex) and a JV with JFE Steel for BPSL, unlocking INR 32,000 crore cash. Management expects Q4 margins to improve on recovering steel prices (up INR 3,500/ton since Dec) and seasonally strong demand, despite coking coal cost headwinds of $15-20/ton. FY27 demand growth guided at 7-9%. Risk: Chinese steel export surge could keep Asian prices subdued.

Guidance read

FY26 volume guidance maintained: production 30.5M tons, sales 29.2M tons: Management expects to broadly achieve full-year guidance for production and sales, with Q4 volumes similar to Q3. Q4 margins expected to improve: Steel prices have recovered INR 3,500/ton since end-December, offsetting higher coking coal costs ($15-20/ton increase). FY27 India steel demand growth 7-9%: Management projects India steel demand growth of 7-9% for FY2027. FY26 capex guidance INR 15,000-16,000 crore: Total capex for FY26 expected in the range of INR 15,000-16,000 crore.

Risk read

Key risks include Chinese steel export surge may keep Asian prices subdued — Chinese steel exports surged 14% to 133.5M tons in CY2025, pressuring regional prices. Anti-involution measures may take time to have effect.; CBAM impact on European exports — CBAM regulations could increase costs for exports to Europe (1.2-1.3M tons annually). Management has not yet quantified the impact and is awaiting clarity.; Iron ore availability and cost — Despite captive mines, 50% of iron ore requirement will be from market. Any supply disruption or price increase could impact costs.; High capex may strain balance sheet — INR 100,000 crore capex over 4-5 years could increase net debt, though BPSL cash inflow provides some cushion..

Promise ledger

Of 3 tracked promises, management 0 met, 3 close, 0 missed.

Tata Steel delivered a steady Q3 FY26 with consolidated EBITDA of ₹8,309 crore (15% margin), supported by record India volumes of 6.34 million tons and cost savings of ₹3,000 crore across geographies. India EBITDA margin remained strong at 23%, while Europe improved but remained under pressure from weak demand and imports. The company expects Q4 EBITDA to improve sequentially on higher volumes and price recovery, with India realizations up ~₹2,300/ton. Key risks include UK policy delays and coking coal cost inflation (~$15/ton QoQ). Management is bullish on Europe's structural turnaround via CBAM and safeguard revisions, but near-term UK losses persist without government action.

Guidance read

Q4 India realizations expected to improve by ~₹2,300/ton QoQ: Management guided a sequential increase in India steel realizations of about ₹2,300 per ton in Q4 FY26, driven by spot price recovery and better mix. Q4 India volumes expected to be ~500,000 tons higher QoQ: India volumes are expected to increase by about 500,000 tons in Q4 compared to Q3, aided by no blast furnace relinings and new Ludhiana plant startup. Netherlands EBITDA expected to expand in Q4 despite mix headwinds: Despite a ~€33/ton QoQ realization decline from mix effects, cost takeouts are expected to more than offset, leading to EBITDA expansion in Q4. UK EBITDA to improve slightly in Q4, but positive only with policy support: UK EBITDA is expected to see a slight improvement in Q4, but turning positive requires UK government safeguard measures and a ~£100/ton spread expansion.

Risk read

Key risks include UK policy delays could prolong losses — The UK government has not yet revised steel safeguard measures, and without action, UK operations may continue to incur significant EBITDA losses.; Coking coal cost inflation may pressure margins — Coking coal consumption costs are expected to rise ~$15/ton QoQ in Q4, partially offsetting price gains in India.; Netherlands class action lawsuit could create liability — A class action lawsuit was filed against Tata Steel Netherlands in December 2025 by an environmental foundation, which is in early legal stages.; US tariffs on Netherlands exports weigh on performance — The 50% US tariff on steel has impacted Tata Steel Netherlands' high-margin US business, with an estimated €50 million adverse impact in 9M FY26..

Promise ledger

Of 4 tracked promises, management 0 met, 0 close, 4 missed.