Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AA/Stable/Crisil A1+’ ratings on the bank loan facilities and non-convertible debentures of Jindal Stainless Ltd (JSL; part of the Jindal Stainless group).

 

Further, Crisil Ratings has withdrawn its rating on the non-convertible debentures of Rs. 874 crores, of which Rs. 375 crores have been withdrawn on their redemption, while the remaining Rs. 499 crores have been withdrawn due to their non-placement and at the client’s request. The withdrawal is in line with the withdrawal policy of Crisil Ratings.

 

The rating reaffirmation reflects the strong business risk profile of JSL, driven by the scale of operations, forward integration, and efficient working capital management along with healthy demand outlook. This will continue to support the high cash accrual and sustenance of strong financial risk profile.

 

Crisil Ratings understands from the management that the ongoing middle east conflict has disrupted global energy supply chains and shipping routes, which has temporarily affected the availability of industrial fuels such as propane/LPG and LNG used in stainless steel production processes. As a result, the company has experienced some operational constraints due to tighter fuel availability, that could affect capacity utilization in the near term. While propane/LP and natural gases contribute only around 1–2% of overall costs, they are operationally relevant for the company.

 

Currently, operations across plants continue, and the company is focusing on converting semi-finished products to finished products with the present reserves. However, if the situation persists, it could affect volumes in the near term, and will remain a monitorable. That said, given the strong liquidity position of the company, with cash and equivalents of Rs. 2,587 crore as on Dec 31, 2025, Crisil Ratings does not expect a material impact in the near term.

 

The ratings continue to factor in the market leadership position of the group in the domestic stainless steel (SS) industry, both in terms of manufacturing capacity and sales volume, efficient operations and sizeable export presence. With combined steel melting capacity of 3.0 million tonne per annum (MTPA) (expected to increase to 4.2 MTPA next fiscal), the group is among the top 10 SS manufacturers globally. The ratings also factor the healthy financial risk profile of the group, led by healthy operating cash accruals, comfortable debt protection metrics and strong liquidity.

 

JSL’s consolidated volumes grew around 9% on-year in fiscal 2025 on account of healthy domestic demand. While blended earnings before interest, taxes, depreciation and amortisation (Ebitda) per tonne slightly moderated at around Rs 19,732 in fiscal 2025 due to global macroeconomic factors and subdued export demand, they have improved during the first nine months of fiscal 2026, wherein the Ebitda per tonne has improved to Rs. 21,341, largely on account of healthy domestic demand, optimization of production mix, improvement in volumes of cold rolled stainless steel, as well as higher cost efficiencies.

 

JSL’s Nickel Pig Iron (NPI) smelter facility in Indonesia - JSL had entered into a collaborative agreement with New Yaking Pte Limited in March 2023, and acquired 49% stake in Nickel Pig Iron (NPI) smelter facility - had commissioned in Q2FY25 , which should enhance the NPI raw material security for the company going forward. Overall, Crisil Ratings expects the consolidated Ebitda per tonne to remain above ~Rs. 20,000/t, supporting healthy consolidated Ebitda and strong financial profile with net leverage (ratio of net debt to Ebitda, including LC acceptances) below 1.5x during the period.

 

Also, Crisil Ratings expects that the earnings of JSL will not be materially impacted by the potential increase in trade tariffs by the US on stainless steel and other imports, given the limited exposure of JSL to the US (expected to < 5% of JSL’s total volume). However, developments on the said front will remain monitorable.

 

Further, Crisil Ratings has taken note of the recently announced capital expenditure (capex) by the group for ~Rs 5,700 crore for both organic and inorganic growth. The capex consists of a 51:49 JV in Indonesia (JSL to be 49% stake partner) for setting up an SMS SS capacity of 1.2 MTPA, another JV in Indonesia for NPI that has already been commissioned and will provide raw material security for the SMS JV, acquisition of a 0.6 MTPA cold rolling plant in Gujarat (Chromeni Steel Ltd), brownfield expansion of downstream capacities (HRAP [hot rolled annealed and pickled] and CRAP [cold rolled annealed and pickled] coil facility) at the existing Odisha plant, as well as upgradation of processing capacities at the Odisha plant with augmentation of infrastructure, ESG projects and specialty steel manufacturing to commensurate with the increased manufacturing capacity of the group.

 

Crisil Ratings understand that the announced capex is on the verge of completion and will likely be completed in fiscal 2027. However, since it has been primarily funded through internal accruals, net debt has not increased materially during the period. Going forward, the company is going to undertake greenfield expansion in Maharashtra to increase capacity by 4 MTPA, for a project cost of Rs. 40,000-42,000 crores. However, the same is to be incurred over a period of 10 years in phases of 1 MTPA each, and the capex is yet to commence, currently being in the stage of land identification and procurement. Crisil Ratings awaits further clarity on the capex phasing and plan, which will remain a monitorable.

 

However, overall debt metrics are expected to remain comfortably below the rating thresholds, with net leverage expected to remain below 1.5 times (including LC acceptances), which will be a key monitorable. Timely execution and ramp-up of facilities without material impact on the capital structure of the company will be a key monitorable.

 

These strengths are partially offset by susceptibility to input cost volatility, realisation and the volatility in the SS industry. The group also faces competition from cheaper Chinese imports. Substantial increase in imports may adversely impact realisations and volume, and hence, remains a key monitorable.

Analytical Approach

Crisil Ratings has consolidated the business and financial risk profiles of JSL, Jindal United Steel Ltd (JUSL; ‘Crisil AA/Stable’) and their subsidiaries. The entities, collectively referred to as the Jindal Stainless group, are in the same business and have strong business and financial linkages and common promoters.

 

Calculation of debt includes LC acceptances.

 

Crisil Ratings has proportionately consolidated JSL’s 49% JV - PT Glory Metal Industry- which is undertaking stainless steel SMS capacity of 1.2 MTPA in Indonesia, given the strong support articulation provided by the management, although on proportionate basis. Furthermore, Crisil Ratings has moderately consolidated the JV- PT Cosan Metal Industry-, that is undertaking NPI smelter business in Indonesia, in proportion to the shareholding of 49%, given it is an associate company and Crisil Ratings understands that the controlling right for the JV is with the other JV partner.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Superior market position along with adaptability in the manufacturing process: The Jindal Stainless group has manufacturing plants in Jajpur, Odisha (2.2 MTPA), and Hisar, Haryana (0.8 MTPA). It is the largest manufacturer of SS flat products in India. Capability to manufacture a wide variety of grades across all series of SS (200, 300 and 400 series—classified based on exact content of nickel and other alloys) helps cater to a diversified end-user base comprising process industries (pharmaceuticals, oil & gas, pharma, aerospace, defense, nuclear power, and among others), equipment manufacturers, automobile-railway-transportation (ART), architecture-building-construction (ABC) and consumer goods (durables and kitchenware) sectors. Furthermore, it can switch manufacturing between various grades of SS within a short time based on demand.

 

In fiscal 2025, exports decreased to 9%, from 13% in fiscal 2024, on account of global macroeconomic uncertainties. At the group level, volume growth was around 9% on-year in fiscal 2025. During the first nine months of fiscal 2026, exports remained moderated at 8%, vis a vis 10% during the corresponding period last year. That said, domestic demand remains healthy, which is reflected by 8% year on year increase in consolidated volumes for the period.

 

The group’s units have well-defined target geographies (the Haryana plant focusses on north and west markets while the Odisha plant focusses on south and east markets) and have varied product segments, including valued-added products such as precision strips, SS blades used in razors, and coin banks for national and foreign mint.

 

Strong domestic demand outlook leading to significant capex: The domestic demand outlook for SS will be healthy over the medium term as it is finding increasing acceptance across multiple industries, such as consumer goods, process industries, ABC and ART. Owing to low corrosion and lifecycle cost, SS has become the preferred material in the Railways for manufacturing coaches (like the Vande Bharat) and foot-over bridges.

 

As a result, the company announced capex of ~Rs 5,700 crore to be undertaken over the next 2-3 years(to be completed in fiscal 2027) to enhance manufacturing and forward integration capacities. It has formed a JV in Indonesia with 49% stake to increase its SMS capacity by 1.2 MTPA. It has acquired a 0.6 MTPA cold rolling plant (Chromeni) in Gujarat as part of forward integration. Further, it is setting up HRAP and CRAP coil facility in Odisha. It is also upgrading its facilities in Odisha and Hisar to cater to the increased capacity of the group.

 

Sustained improvement in Ebitda per tonne led by operating efficiency: Ebitda per tonne moderated to Rs. 19,723 in fiscal 2025, largely on account of global macroeconomic factors and subdued export demand.However, it improved to Rs 21,324 during the first nine months of fiscal 2026 on account of downstream capacity additions, operational efficiency, product integration and synergy benefits, while volumes have improved by 11% year on year during period.

 

While realisations are dependent on the prices of inputs (nickel and chrome ore) and product mix (200, 300, 400 series), the group has undertaken several measures to improve its operating performance. The JSL plant has installed a railway siding and inland container depot to transport raw materials and finished goods, leading to savings on logistics costs, and has substituted high-cost propane with cheaper coke oven gas. Furthermore, the JSL plant is in Odisha, which has 93% of India’s chromite ore reserves (apart from nickel, chrome is a key input in making SS) and is supported by a captive 264-megawatt (MW) power plant which meets the bulk of its power requirement. Furthermore, with the acquisition of a stake in the NPI smelter facility, the group has secured its raw material requirements going forward. It has the flexibility to shift production to SS series with lower nickel content (such as 400 and 200 series) depending on market conditions, which enhances sustainability of operations. The company has diversified its product offerings via inorganic acquisition of Rabirun Vinimay Private Limited and JSL Super Steel Limited (erstwhile Rathi Super Steel Limited) to foray into pipe and tube products and long products as well.

 

With healthy domestic demand in fiscal 2026 and beyond, Crisil Ratings expects the group to generate blended Ebitda per tonne more than Rs 20,000 on a sustained basis.

 

Financial risk profile to remain healthy despite capacity addition: The company has sustained a healthy financial risk profile, despite the ongoing phase of capex and merger with JUSL. While consolidated net debt to Ebitda ratio(including LC acceptances) increased in fiscal 2025 to 1.84 times due to ongoing capex, it is expected to remain below 1.5 times going forward. Furthermore, TOL/TNW ratio was 1.28 times as on March 31,2024, against 1.25 times as on March 31,2024. 

 

During the first nine months of fiscal 2026, Consolidated Ebitda stood at around Rs. 4,106 crore (Rs. 3,606 crores during the corresponding period in fiscal 2025) with net debt to Ebitda ratio at 1.3 times, on a trailing twelve-month basis (1.1 times in fiscal 2024). While Crisil Ratings expects the net debt to ebitda to remain at similar levels by the end of the current fiscal, however, overall debt metrics are expected to remain comfortably below the rating thresholds.

 

Crisil Ratings expects that the company will generate healthy consolidated Ebitda and operating cash accruals on the back of robust domestic demand for stainless steel and efficient operations. Ebitda per tonne is expected to be more than Rs -20,000 over the medium term, benefiting from healthy utilisation rates, prudent working capital management and improving product mix. This should support the ongoing capex and limit the dependence on external debt.

 

Expected to be completed within fiscal 2026-27, the recently announced capex will increase the SS volume capacity of the company to 4.2 MTPA, along with improved forward integration on account of increase share of cold rolling and hot rolling capacities. Crisil Ratings expects JSL’s track record of capacity expansion along with healthy cash accruals from existing operations to fund the capex provides comfort against the project execution risk. However, any material time or cost overrun for the capex, against the expectations, will be key monitorable.

 

The consolidated net debt to Ebitda ratio is expected to remain below 1.5 times (leverage threshold) over the medium term. Any significant debt-funded capex/acquisition, resulting in deviation from this understanding, will be a key rating sensitivity factor.

Key Rating Drivers - Weaknesses 

Threat from imports: While the Jindal Stainless group is the largest SS player in India, it faces competition from imports, mainly from China. A sharp rise in imports in fiscal 2020 put pressure on the margins and volumes of domestic players. Imports are likely to be largely limited to the 200 series having application in consumer goods (mainly kitchenware), whereas the group’s focus remains on sectors such as auto, railways and construction, which require 300 and 400 series thereby mitigating the risk to an extent. However, any significant rise in imports can adversely impact realisation and volume of domestic players and hence remains a key monitorable.

 

Susceptibility to volatility in input cost, and realisation, and cyclicality in the industry: Prices of key raw materials such as SS scrap and finished SS products are largely linked to nickel prices, which tend to be highly volatile. This had led to unfavorable price cycles for the sector in the past. Moreover, as a certain amount of nickel is always maintained as inventory, price fluctuations led to inventory gains or losses in the past and thus, remains a key monitorable. The group entered a joint venture for developing an NPI plant in Indonesia, which has been commissioned and provides security to raw material linkages and stability to the operating margin.

 

Furthermore, the group has taken several steps to gain the ability to pass on input price increases, including tie-ups with original equipment manufacturers in the automotive, lifts and other industrial segments, with pass-through clauses in contracts. It has also entered volume-based memorandum of understanding (MoUs) with distributors where pricing is set on a periodic basis. However, the ability to pass on the full impact of price hikes will also depend on the underlying demand scenario. As a result, the increase in nickel prices may impact volumes of SS grades with high nickel content as their prices move in tandem. While the group can shift between various grades of SS, impact of volatility in nickel prices on volume will be a key monitorable.

 

During fiscal 2025, the prices of nickel, which forms a crucial raw material for lower grade SS, moderated by around 35%, and continued to moderate in fiscal 2026, yet the company was able to sustain the Ebitda per tonne above Rs 20,000 by optimizing around the various grades of SS.

Liquidity Strong

Crisil Ratings estimates annual consolidated net cash accrual at Rs 3,400 - 3,700 crore in fiscals 2026 and 2027, which will largely cover the planned capex and repayments for the period.
 

Liquidity is further supported by cash and equivalent of around Rs 2,587 crore as on December 31, 2025. Healthy cash accrual, absence of any significant term debt obligation over the next two fiscals and moderately utilized working capital limit, should comfortably cover the capacity expansion plans and any incremental working capital requirement.

ESG Profile

The environment, social and governance (ESG) profile of JSL supports its already strong credit risk profile.

 

SS manufacturing has a significant impact on the environment owing to high greenhouse gas (GHG) emissions, waste generation and water consumption. This is because of the energy-intensive manufacturing process and its dependence on natural resources. The sector also has a significant social impact because of its large workforce across operations and value chain partners, and as its operations affect the local community and involve health hazards. JSL is focused on mitigating its environmental and social risks. The company is also working on a strategic roadmap for achieving decarbonization and is evaluating continuous upgrades and retrofits, adoption of clean technologies and strategies to improve ESG performance. 

 

Key ESG highlights

• JSL aims to achieve Net Zero emissions by 2050 and a 50% reduction in carbon emission intensity by 2035, compared to the baseline of FY 2022. In FY 2025, JSL achieved a 7% reduction in GHG emissions intensity (Scope 1 and 2) to 1.85 tCO2e/tcs, from 1.98 tCO2e/tcs in FY 2022. Furthermore, the company's Scope 1+2 and Scope 3 emissions intensity decreased by 14% from FY 2024.
• JSL currently sources approximately 26% of its power from renewable sources and is actively exploring opportunities to increase this share through green hydrogen, solar, and hybrid renewable projects
• The company is working towards achieving 'Zero-Waste-to-Landfill' certification by 2030, with only 2% of its total waste currently being disposed of through landfills.
• JSL has implemented Zero liquid discharge, ensuring that 100% of water is recycled across its relevant facilities.
• JSL is one of the few Indian companies to publish a report on the Task Force on Nature-Related Financial Disclosures (TNFD), highlighting its nature-related dependencies, impacts, risks, and opportunities.
• The company's workforce has a gender diversity ratio of around 4%, in line with its peers in the sector. JSL also demonstrated a strong safety culture, with zero Lost Time Injury Frequency Rate (LTIFR) and fatalities in FY 2025.
• The company's governance structure features a strong independent board representation (around 56%) and a significant presence of women (around 33%), including a dedicated ESG committee and comprehensive financial and non-financial disclosures.
   

JSL’s commitment to ESG principles will play a key role in enhancing stakeholder confidence, given the sizeable share of market borrowing in its overall debt and access to both domestic and foreign capital markets.

Outlook Stable

JSL is likely to sustain its healthy operating performance over the medium term, aided by healthy demand for SS, focus on high-margin segments, increased capacities and synergies arising from its recent acquisitions. Absence of any significant debt-funded capex or acquisition and healthy cash flow should help sustain healthy financial risk profile over the medium term.

Rating sensitivity factors

Upward factors:

• Sustained improvement in operating profitability supported by higher-than-expected operating rates, along with consolidated Ebitda per tonne of Rs. 20,000-Rs 21,000 on a continued basis
• Higher-than-expected free cash generation supporting improved credit profile with gearing (ratio of TOL/ANW) below 1.0 time and net debt/Ebitda ratio (including LC acceptances) lower than 1.5 times on sustained basis
• Timely commissioning and ramp up of ongoing capex without any cost overrun resulting in increase in scale of operations in terms of operating revenue and operating cash accruals from current levels

 

Downward factors:

• Weakening of profitability, with consolidated Ebitda per tonne lower than Rs 18,000 on a sustained basis
• Lower-than-expected cash accrual or significant debt-funded capex or acquisition resulting in higher-than-expected gearing or consolidated net debt/Ebitda ratio (including LC acceptances) higher than 1.5 times on sustained basis

About the Company

JSL, a listed entity, is one of the largest SS manufacturers in India, with steel melting capacity of 3 MTPA (0.8MTPA in Hisar and 2.2 MTPA in Jajpur) and further ramping up to reach 4.2 MTPA. Its plant in Jajpur is supported by a captive power plant of 264 MW, ferroalloy plant of 0.25 MTPA, CRAP plant of 1.45 MTPA and HRAP capacity of 1.9 MTPA. Operations are also supported by a 3.92-MTPA hot strip mill (HSM), including JUSL, 100% owned by JSL. JUSL converts SS slabs produced by JSL into hot-rolled coils.

 

JSHL, (merged with JSL effective March 02, 2023) has a 0.8 MTPA SS plant in Hisar. It procures ferrochrome from JSL as well as from the open market. Its plant is the largest manufacturer of SS blades, used in razors, globally. The company also manufacturers various grades of specialty SS products.

Key Financial Indicators (JSL consolidated; Crisil Ratings-adjusted numbers)

As on / for the period ended March 31	Unit	2025	2024
Operating income	Rs crore	39,326	38,562
Adjusted profit after tax (PAT)	Rs crore	2,500	2,693
Adjusted PAT margin	%	6.40	7.00
Adjusted debt/adjusted networth	Times	0.42	0.45
Interest coverage	Times	8.11	8.5

During the first nine months of fiscal 2026, the company has reported a consolidated operating income of Rs. 31,617 crore and PAT of 1,910 crore (vis a vis Rs. 29,114 crore and Rs. 1,910 crore during the corresponding period last year).

Any other information: Not applicable

Annexure – List of entities consolidated

Name of the entity	Extent of consolidation	Rationale for consolidation
Jindal Stainless Ltd*	Full	Subsidiaries
PT Jindal Stainless Indonesia	Full
JSL Group Holdings Pte Ltd	Full
Iberjindal SL	Full
Jindal United Steel Ltd	Full
Jindal Stainless FZE	Full
Jindal Stainless Park Ltd	Full
Jindal Stainless Steelway Ltd	Full
Jindal Lifestyle Ltd	Full
Green Delhi BQS Ltd	Full
JSL Logistics Ltd	Full
Jindal Strategic Systems Ltd	Full
JSL Super Steel Ltd	Full
Sungai Lestari Investment Ltd	Full
Rabirun Vinimay Private Ltd	Full
Chromeni Steel Ltd	Full
Evergreat International Investment Pte. Ltd	Full
Sulawesi Nickel Processing Industries Holding Pte. Ltd	Full
PT Cosan Metal Industry	Equity Method	Associate
PT Glory Metal Industry	Moderate	Subsidiary

*JSHL, JSL Lifestyle Ltd (railway division), JSL Media Ltd and JSCMS were merged with JSL on March 2, 2023