JSW Steel Limited: history, ownership, mission, how it works & makes money

A Brief History of JSW Steel Limited

JSW Steel Limited, established in 1994, is a subsidiary of the JSW Group, one of the leading conglomerates in India. The company is headquartered in Mumbai and is known for manufacturing a diverse range of steel products. It has made significant strides in the industry, expanding its capacity and production capabilities over the years.

In 1997, JSW Steel commenced its first steel plant in Vijayanagar, Karnataka, with an initial capacity of 1.8 million tonnes per annum (MTPA). By 2003, the company expanded its production to 3.6 MTPA through a modernization program.

In 2005, JSW Steel initiated the expansion of the Vijayanagar plant, which was completed in 2010, increasing the capacity to 10 MTPA. This made it one of the largest integrated steel plants in India. The company further expanded its operations by acquiring loss-making steel plants such as the VISA Steel and the Bhushan Power & Steel plants in 2018.

As of March 2023, JSW Steel's total annual production capacity stood at 18 MTPA, with plans to increase it to 25 MTPA by 2025. This growth aligns with India's rising demand for steel, which is projected to grow by 5-6% annually.

Financially, JSW Steel reported a revenue of approximately ₹1,24,000 crore (around USD 16.5 billion) for the fiscal year 2022-23. The company achieved an EBITDA of ₹25,000 crore (about USD 3.3 billion), resulting in an EBITDA margin of 20%.

The company’s net profit for the fiscal year 2022-23 was approximately ₹10,000 crore (around USD 1.3 billion), representing a growth of 15% compared to the previous fiscal year.

JSW Steel has also invested significantly in sustainability and innovation, with a focus on reducing carbon emissions and enhancing energy efficiency in its manufacturing processes. The company aims to be a leader in green steel production, aligning with the global shift towards sustainable practices.

In terms of market position, JSW Steel has consistently ranked among the top steel producers in India and has a significant presence in the global steel market. As of October 2023, the company held a market capitalization of approximately ₹1,36,000 crore (around USD 18 billion), making it one of the largest steel companies in India.

Over the years, JSW Steel's commitment to quality, technological advancements, and strategic acquisitions has positioned it as a key player in the steel industry, supporting infrastructure development across India and contributing to the nation’s economic growth.

A Who Owns JSW Steel Limited

JSW Steel Limited, a prominent player in the Indian steel industry, has a diverse ownership structure comprising institutional investors, foreign investors, and individual shareholders. As of the latest data available, the shareholding pattern is as follows:

The promoter group of JSW Steel is primarily led by the Sajjan Jindal family. Sajjan Jindal is the Chairman and Managing Director, who plays a crucial role in the strategic direction and overall management of the company.

As reported in the first quarter of FY2023, the total revenues of JSW Steel reached approximately ₹38,853 crores, marking a year-on-year growth. The company also reported a consolidated net profit of ₹4,259 crores during this period.

The institutional ownership includes a range of domestic and foreign mutual funds. Notably, the largest institutional shareholders include:

• ICICI Bank Ltd
• SBI Mutual Fund
• HDFC Mutual Fund

Foreign shareholding primarily consists of funds like the Government of Singapore Investment Corporation, BlackRock, and Fidelity Investments, which have shown increasing interest in the stock due to its robust performance in the steel sector.

In terms of market valuation, as of October 2023, JSW Steel had a market capitalization of approximately ₹1.52 lakh crores. With a current stock price hovering around ₹710, it has shown resilience despite fluctuations in raw material prices and global market conditions.

The company maintains a strong presence both in the domestic and international markets, with exports contributing around 18% to its total sales in the last reported quarter. JSW Steel's production capacity stands at approximately 18 million metric tonnes per annum, establishing it as one of India's largest steel manufacturers.

In terms of future growth, JSW Steel's strategic plans include expanding its capacity to about 30 million metric tonnes by 2025 through various investments and acquisitions, enhancing its competitive edge in the global steel market.

JSW Steel Limited Mission Statement

JSW Steel Limited is a leading player in the Indian steel industry, with a clear focus on sustainability and innovation. The company’s mission statement emphasizes the commitment to producing high-quality steel products while contributing to sustainable development. JSW Steel aims to achieve this by leveraging technology, enhancing operational efficiency, and fostering a culture of teamwork and safety.

As of the second quarter of FY 2023, JSW Steel reported a consolidated revenue of ₹38,320 crores, showcasing a year-on-year growth of 16%. The company's EBITDA for the same period stood at ₹9,580 crores, reflecting a margin of 24.9%.

In alignment with its mission, JSW Steel has committed to reducing carbon emissions by 42% by the year 2030. The company is investing in innovative technologies such as electric arc furnaces and renewable energy sources to achieve these targets. In FY 2022, JSW Steel utilized approximately 13% of clean energy in its overall energy consumption.

Moreover, the company’s initiatives in community development and corporate social responsibility reflect its mission to be a responsible corporate citizen. JSW Steel has invested over ₹100 crores in various social development programs in fiscal year 2023 alone, focusing on education, healthcare, and livelihood generation.

JSW Steel Limited also prioritizes safety and health in its operations, aiming for a zero accident workplace. The company's total recordable injury frequency rate (TRIFR) was reported at 0.35 for FY 2023, indicating a consistent focus on employee safety.

In conclusion, JSW Steel Limited’s mission statement is intricately linked to its operational strategies, growth metrics, and commitment to sustainable practices, ensuring the company maintains its leader status in the steel industry while contributing positively to society and the environment.

How JSW Steel Limited Works

JSW Steel Limited operates primarily in the steel manufacturing sector and is one of the leading players in the industry. The company is involved in the production of a variety of steel products catering to multiple segments including infrastructure, automotive, and construction.

JSW Steel has a total installed capacity of approximately 18 million tonnes per annum (MTPA) as of FY 2023. It is part of the larger JSW Group, which has diversified interests in various sectors. The company has manufacturing units located in various parts of India including Karnataka, Maharashtra, and Tamil Nadu.

The production process at JSW Steel involves the use of advanced technology and processes, including the Direct Reduced Iron (DRI) method, which helps in reducing the carbon footprint while ensuring high-quality steel output. The plants are equipped with state-of-the-art facilities and contribute significantly to the company's operational efficiency.

Financial Performance

For the fiscal year ending March 2023, JSW Steel reported a consolidated revenue of approximately ₹2,01,157 crore, showing a growth of approximately 29% year-on-year. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at around ₹56,812 crore, resulting in an EBITDA margin of approximately 28.3%.

Stock Performance

As of October 2023, JSW Steel's share price was trading around ₹719 per share. Over the past year, the stock has shown a volatility range of approximately ₹550 - ₹760, reflecting both market sentiment and the company's operational updates.

The market capitalization of JSW Steel is approximately ₹2,20,000 crore, making it one of the top steel producers in India by market value.

Production and Capacity Utilization

Market Segments

JSW Steel serves several critical sectors, including:

• Infrastructure
• Automotive
• Construction
• Energy

The company has a significant footprint in the automotive sector, producing various components like high-strength steel used for vehicle frames. In the construction segment, JSW Steel supplies raw materials for major infrastructure projects across India.

Innovations and Sustainability

JSW Steel has been actively pursuing sustainable practices. In FY 2023, the company reduced its carbon emissions intensity by approximately 5% compared to the previous year, with a goal to achieve carbon neutrality by 2050.

The company also invests in research and development for new steel grades and applications, contributing to advancements in the industry. JSW Steel has been focusing on digital transformation, incorporating AI and data analytics into its operations for enhanced productivity and decision-making.

In conclusion, JSW Steel's extensive production capacity, robust financial performance, and commitment to sustainability underscore its pivotal role in the steel industry, driving both economic growth and innovation.

How JSW Steel Limited Makes Money

JSW Steel Limited, one of India's leading steel manufacturers, generates revenue through various avenues within the steel production and related segments. The company primarily produces flat and long steel products, catering to diverse sectors such as construction, automotive, and infrastructure.

Revenue Streams

• Flat Products: This segment includes hot-rolled, cold-rolled, and coated steel products.
• Long Products: This consists of bars, rods, and sections utilized mainly in construction.
• Value-Added Products: These are specialized steel products that offer higher margins.
• International Operations: JSW Steel has a footprint in several countries, contributing to its revenue through exports and global partnerships.

Financial Performance

As of the fiscal year ending March 2023, JSW Steel reported consolidated revenues of ₹1,72,684 crores, demonstrating a year-on-year growth of 26%. The company's EBITDA stood at ₹37,953 crores, with a corresponding EBITDA margin of 21.9%.

Production Capacity

JSW Steel has a substantial production capacity, amounting to approximately 18 million tonnes per annum (MTPA) as of 2023. This capacity is expected to increase as the company ramps up expansions in different facilities.

Cost Efficiency

JSW Steel's operational efficiency plays a crucial role in its profitability. The company implements advanced technologies and processes to minimize costs. In FY 2022-23, the cost of production per tonne was ₹51,500, which is an improvement from ₹54,000 in FY 2021-22.

Market Position

JSW Steel holds a significant market share in India, estimated at 18% in the domestic steel sector. The company is also focusing on enhancing its market presence globally, increasing exports to regions like Europe, ASEAN, and North America.

Environmental Initiatives

In line with global sustainability trends, JSW Steel invests in various green initiatives. It aims to reduce carbon emissions by 30% by 2030, which not only helps in regulatory compliance but also enhances its brand value in the market.