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JSW Steel Ltd.
BSE Code 500228
ISIN Demat INE019A01038
Book Value(Rs.) 164.53
Dividend Yield % 0.65
Market Cap(Rs. in millions) 746679.39
P/E 30.12
EPS 10.26
Face Value(Rs.) 1  
Year End: March 2016



JSW Steel, the flagship company of the JSW Group, is among the world's iconic steel enterprises, and has emerged as a leading manufacturer of steel in India. JSW Steel is the only TMT Rebar producer through integrated route in the western India. The Company has an installed capacity of 18 MTPA. It has six manufacturing facilities across Southern and Western India. Its Vijayanagar Works rebrsents largest capacity at a single location in the country. Primarily banking on domestic demand, its global footprint extends to the US, South America, Middle East and Africa.


• Project execution capabilities

• One of the lowest-cost steel producers globally

• Wide product portfolio with customisation to suit evolving customer requirements

• Use of cutting-edge innovative technology

• Strategic focus on value-added and special steel products

• Flexible sourcing of inputs and dynamic marketing strategies

Export reach to over 100 countries, strong domestic brsence


Our product canvas in case of flat and long steel products includes:


• Hot Rolled (HR) coils, sheets and plates

• Cold Rolled coils and sheets

• Galvanised products

• Galvalume products

• Non-grain oriented Electrical steel (CRNGO)

• Pre-painted galvanised products (Colour Coated Sheets / Coils)

• Pre-painted Galvalume products


• TMT bars

• Wire rods

• Special steel bars / wires

• Rounds and blooms

• Angles



The global economic growth remained largely subdued at 3.1% in CY2015 as against 3.4% in CY2014. The emerging markets and developing economies' growth which still accounts for over 70% of global growth, declined for the fifth consecutive year and the advanced economies witnessed a modest but uneven recovery. However, the global economy saw a sizeable leg down in the last quarter of CY2015 - in both advanced and emerging markets and developing economies. During the year, the global economic activities were negatively impacted by: a) a gradual slowdown and rebalancing in China leading to lower investments and negative impact on global trade flows and export dependent economies, b) overcapacities and higher output gap leading to worldwide debrssed investment, c) a downward brssure on prices of energy and commodities, d) a hawkish US Fed commentary which added to the volatility in the financial, currencies as well as commodity markets and e) debrssed domestic demand with growing disorder of global trade has resulted in increasing trade remedial actions by various economies.


• The US is transitioning to a new normal, its economic growth stood at 2.4% in CY2015 - similar to CY2014. During the year, the benefits of strengthening corporate balance sheets, contained fiscal drag, and an improving housing and labour market were offset by weaker than expected domestic demand and weak performance of the manufacturing sector as well as declining exports due to stronger dollar/adverse external trade environment.

• The Euro area economy grew by 1.6% in CY 2015 - faster than CY 2014. Its business cycle continued to largely shrug off global growth concerns with support from three tailwinds: a) lower oil prices (boosting consumer expenditure/domestic demand), b) expansionary fiscal policies, and c) an accommodative ECB. However, sub­zero inflation, high non-performing loans and debt trajectories, low investment, and eroding skills due to high long-term unemployment remained key challenges for the area.



In CY 2015, Japan's economic growth at 0.5% was weaker than expectations from the benefits of Abenomics. The corporate profits improved but they were driven by JPY debrciation and lower oil prices. The capacity-boosting investments remained muted with lower capacity utilization as sales growth failed to pick-up.

Economic activity in other Asian advanced economies (Hong Kong Special Administrative Region and Taiwan Province of China) closely integrated with China weakened sharply during the first half of 2015, owing in part to a steep decline in exports. Economic activity picked up by less than expected during the second half of the year, as domestic demand remained weak; and the pace of recovery in exports was relatively modest.

The Chinese economic growth moderated to 6.9% in CY 2015. The slowdown and rebalancing of the economy led to a decline in investment in real estate, manufacturing and allied industries. The emerging and export market economies were negatively impacted by China's rebalancing as it resulted in a broad-based slowdown in global trade, and volatility in commodity as well as financial markets.

The economic performance of many African countries was also disappointing. Resource-intensive countries in Africa suffered a two-fold blow. First owing to a decline in the prices of commodities; and second because their frontier markets were adversely affected by tighter global financing conditions.


India's GDP grew by 7.6% in FY2016, registering a stellar performance in a world battered by sluggish growth as well as turbulent financial and commodity markets. The Government of India has ushered in various reforms in agriculture, manufacturing and services sectors to help the economy realise its full potential. The economy also benefited from declining fiscal deficit, moderating inflation, lower oil prices and an easing interest rate trajectory.

The Indian economy, however, also faced major headwinds during the year in the form of : a) slow agricultural growth due to two consecutive years of poor monsoons, b) disappointing manufacturing output owing to weak demand and low commodity prices, c) sharp contraction in exports due to weak global demand and low commodity prices and d) growing NPA's and stressed assets.

India's trade deficit declined to US$ 5.1 billion in March 2016. This was the result of a fall in net imports by 21.6%. Stability in the political environment and the Government's pro-reform approach continued to strengthen the confidence of entrebrneurs and investors. Higher infrastructure spending, increased fiscal devolution to states, and the focus on enhancing the ease of doing business resulted into improved investor sentiment and business outlook.

The Government's 'Make in India' initiative has also encouraged domestic entrebrneurs to match global best practices and also attracted FDI. The Make in India initiative is expected to help the country emerge as a hub for global manufacturing bellwethers. This, together with expansion in services is expected to stimulate employment, as well as higher consumer spending.

The Government also introduced the JAM Trinity (Jan Dhan Yojana, Aadhaar and Mobile) to bolster financial inclusion and bring large unbanked parts of the population into the ambit of formal channels of finance. In addition, payment banks and small finance banks are expected to drive micro-credit offtake, besides reforming the Indian financial sector.


• Asia's third largest economy has recently crossed the US$ 2 trillion dollar mark; and the GDP growth rate for the fourth quarter was 7.9%, even as emerging markets like China, Russia and Brazil continued to slow down.

• For the second consecutive year, India experienced less-than-normal monsoons, leading to lower agricultural output. The sector grew by 1.2% over the brvious year.

• In contrast, the industrial sector grew by 7.4%, whereas the service sector growth was at 8.9%.

• Exports declined by 18% due to low prices of commodities and lacklustre global demand.



In CY2015, the global steel demand declined by 3% to 1,500 million tonnes, primarily due to the slowdown in China and globally a low investment trend.

Global steel industry continued to be impacted by large overcapacity especially in China, Japan, Korea and CIS. Though the steel production decreased in all regions except Oceania during the year, the decline in production was slower than the drop in demand. Global crude steel production decreased by 2.9% to 1,621 million tonnes in 2015. Exports from the steel surplus countries flooded the global steel markets leading to a severe brssure on supply and demand balance and steel prices. Consequently, the negatively impacted countries intensified trade remedial actions to check the surge in imports from steel surplus countries. Meanwhile, the oversupplied iron ore and coking coal market also followed the trend of the falling steel prices.

Towards the end of the financial year 2015-2016, the global steel price recovered mainly due to the thrust on stimulus and physical market tightness in China. However, the sharp


price recovery in Chinese steel prices fizzled out recently as the Chinese steel market fundamentally continues to be challenged by overcapacity and slowing investments trend. The prices in other regions are witnessing lesser volatility due to broad-basing of trade remedial measure


Global economy continues to grow, albeit at a slow pace. The industrial activities across major regions/countries remain subdued despite sustained monetary easing. It appears that a pickup in global activity levels will be more gradual as downside risks to growth have increased - with issues related to persistent deflationary environment, political uncertainty in EU and risk of Brexit, a lack of confidence on sustainability of commodity prices and volatile capital flows and currencies. The International Monetary Fund (IMF) has revised down its projections for CY 2016 World Economic Growth yet again to 3.2% compared to 3.1% in CY 2015.

Developed markets prospects' remain subdued due to low investment, unfavourable demographics, and weak productivity growth. The Euro Area and the US both face certain unfavourable factors. The Euro Area continues to battle migrant crisis, sub-zero inflation and high non-performing loans. In the US, economic growth is likely to be steadier in near term rather gaining any upward momentum as improved fiscal condition and housing market is being offset by lower exports, weakening manufacturing sector and declining investment in energy sector.

The emerging economies also remain vulnerable to further declines in commodity prices, currency devaluation and internal political turmoil. The Chinese economy is transitioning to a more balanced growth path after a decade of strong credit and investment growth. As the prior excesses in China's economy are unwinding; its investment in real estate, manufacturing and allied industries is declining. This is impacting trade growth as well as sharp scaling down of investment in commodity markets/economies. Despite all of this, the recovery, which is expected to strengthen only in CY 2017 and beyond, will be driven primarily by emerging market and developing economies as conditions in stressed economies start gradually to normalize.

The global steel industry continues to face headwinds of weak demand and overcapacity. What is more worrisome is that Chinese Steel production as well as exports surged back in recent months. The World Steel Association forecasts Chinese steel demand to drop by 4% in CY 2016 leading to a decline in global steel demand further by 0.8% to 1,488 MnT. CY 2016 Steel demand in developed economies is expected to grow by 1.7% whereas it is expected to increase by just 1.8% in Emerging and Developing economies (ex-China).


Despite multiple headwinds, India produced 89.8 MnT crude steel in FY 2015-16, an increase of 0.9% since last year. In FY 2015-16, the country consumed 80.5 million tonnes (MnT) of finished steel, growth of 4.5% over last year. The industry growth is driven by an availability of raw materials such as iron ore and cost-effective labour.

India was the only major steel consuming market globally which continued to witness increasing demand environment - finished steel demand growth stood at 4.5% in FY 2015­16. However, the country suffered from an unbrcedented, unbridled and unfair inflow of steel imports from countries like China, Japan, South Korea and Russia, which continued to sell their surplus steel production at brdatory prices. South Korea and Japan, especially, benefited due to the free trade agreement with India. Consequently, the consumption of domestically produced steel fell by 0.6% during the financial year. The domestic steel industry was forced to take a series of price cuts - leading to a severe margin squeeze for the Indian steel companies.

The surge in imports at brdatory pricing led to the Indian government first increasing import duty on carbon steel by 5% (in two steps). Subsequently, it also imposed a safeguard duty on certain hot rolled steel products. When these measures were ineffective, in February 2016, the Government imposed a minimum import price (MIP) on various steel products for a period of six months to create a level playing field for the domestic steel industry.

Meanwhile, Indian steel manufacturers (including JSW Steel) continued their focus on enhancing product mix/quality standards, rationalizing cost and manufacturing value-added steel products to minimize erosion of margins.

Relevant facts about domestic steel : (Performance in FY'16 with reference to FY'15 : JPC)

• Capacity - 117 MnT grew by 6.4% (110 MnT)

• Crude Steel Production - 89.8 MnT grew by 0.9% (89 MnT)

• Consumption - 80.5 MnT grew by 4.5% (77 MnT)

• Steel Imports - 12.7 MnT grew by 26.7% (10 MnT)


The Government of India is aiming to scale up steel production in the country to 300 MnT by 2025 from current levels. Some of the other recent government initiatives in this sector are as follows:

The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs. 200 crore.

Government of India plans to auction eight coal blocks with reserves of 1,143 million tonnes to steel and cement firms.

Government has planned Special Purpose Vehicles (SPVs) with four iron ore rich states i.e., Karnataka, Jharkhand, Orissa, and Chhattisgarh to set up plants having capacity between 3 to 6 MTPA

A Project Monitoring Group (PMG) has been constituted under the Cabinet Secretariat to fast track various clearances/resolution of issues related to investments of Rs. 1,000 crore or more.

To increase domestic value addition and improve iron ore availability for domestic steel industry, duty on export of iron ore was increased to 30%.

In union budget 2016-17 the Government of India has proposed to spend Rs. 2,18,000 Crores on roads and railways.


Despite challenges, India has emerged as one of the brightest spots in a world grappling with economic turbulence and fragile growth. It is expected to be the largest growing economy in the world in FY 2017 with a growth rate anywhere between 7.5-8% – driven by the fundamentals of strong consumption and growth in real income as well as the government's push for streamlining business processes. The Indian economy continues to recover gradually as public capital expenditure (with focus on infrastructure creation and extensive urbanization/Smart Cities) and foreign direct investment continue to improve. The infrastructure project awards are seeing a pick-up with higher budgetary allocations. The household consumption demand is expected to benefit from the upcoming Pay Commission award, continued low commodity prices, recent interest rate cuts, and measures announced in the Union Budget 2016-17 to transform the rural sector. The consumer confidence remains upbeat, while the corporate sector's expectations of business conditions remain positive. The expectations of a normal monsoon this year is likely to drive consumer discretionary spending in rural areas. Overall, the Indian economy is poised to realize the benefits of large scale capital expenditure, policy initiatives by the Government, and corporate deleveraging in FY 2017.

As per the WSA, the Indian steel demand growth rate in CY 2016 is expected to be the highest amongst the top 10 steel consuming regions/countries which account for more than 85% of the world steel consumption. JSW Steel expects Indian steel demand to grow by about 6% in FY 2017.

The Indian government's measures to pump prime the economy and progress on various policy reforms underpin a constructive medium term demand outlook. However, this also makes India an attractive export destination for steel surplus countries. Imposition of minimum import price on various steel products has provided some relief; however, the industry sees the need for adequate, swifter and longer shelf-life trade remedial measures to check unbridled and unfair imports of steel in to India



JSW Steel recorded crude steel production for FY 2015-16 at 12.56 million tonnes. There were planned shutdowns for modification and capacity enhancement resulting in lower production volumes during the second half of financial year.

JSW Steel's diversified portfolio is aligned to address the growing demand for steel worldwide. The Company's investments in setting up downstream facilities such as the Cold Rolling Mill (CRM), Continuous Annealing Line (CAL), Galvanneal, Colour Coated and Bar & Wire Rod Mill anticipated this trend. The emphasis on enriching the product mix further, continued throughout the year with a sharp focus on high-value products, i.e. value-added and special products. This segment grew over the past year to comprise 35% of overall sales. Given the sluggishness of export markets, JSW Steel was able to rapidly shift focus to enhancing penetration and sales in the domestic market, especially retail.

The Company delivered an industry leading performance in the domestic market, with a 20% increase in volumes YoY and domestic sales crossing the 10 million ton mark.


The key highlights of FY 2015 - 16 were:

• Domestic Sales up by 20%

• Retail sales up by 75%

• Value-added product share in total business at 35%

• Branded products sales grew 126% YoY & share of branded sales in total sales increased to 45% in FY 16 from 35% in FY 15

• TMT sales increase 86% YoY & CRCA grew 41% YoY


The diversified portfolio of JSW Steel is one its biggest strength, which not only acts a natural hedge against sector volatility, but also gives agility to the organization to implement strategies best suited to the economic environment of the country


Flats comprised 76% of product portfolio in FY 2016

Production of flat products was lower in the fiscal due to planned shutdowns for modification and capacity enhancement. There was also re-orientation of exports, where volumes were reduced in exports focussing on the domestic market. Cold rolled, Galvanised & Colour Coated registeredgrowth in domestic sales. Hot rolled products witnessed a dip in volumes due to increased captive consumption.



Hot Rolled products comprised 44% of product portfolio in FY 2016

Hot Rolled coils and sheet are manufactured at Vijayanagar and Dolvi Works . During the year:

• Sales volume of CTL Sheets / Plates increased by over 19% .

• Captive consumption of HR increased resulting thereby reducing the overall HRC sales volumes by 15%

• Retail sales of general grade hot rolled products however grew in the domestic market.

The major market sectors in India are Automotive, Construction & Infra, Industrial & Engineering and Consumer Durables. There are many sub-sectors like Yellow Goods, Pipes & Tubes, Packaging etc.

In-roads were made into sub-sectors like Yellow Goods, thereby increasing volumes in the Industrial & Engineering sector.

In Automotive, additional approvals were received for 2 new grades for 2 applications.

It is important to note that the Company could maintain and increase its volumes in all the sectors despite challenges posed by the heavy imports for major part of the fiscal.

4.1.2 COLD ROLLED Volume

Cold Rolled products comprised 16% of product portfolio in FY 2016

Cold Rolled coils and sheets are manufactured at Vijayanagar works for sales to external customers. During the year sales volume of CRCA increased 41% considerable headway in approvals of automotive grade steel. New cold rolled grades were approved over 8 applications like roof, doors etc.

The company started producing Electrical steel in the year with technological know-how from JFE Steel Corporation, Japan. Electrical steel has usage across sectors such as electric motors, generators, nuclear power station, power generation plant and equipment, domestic appliances, transformers & automotive electricals.

In the first year, the Company got approvals from over 75 customers and commenced supplies. Approvals were also received from 9 large OEMs for supplies to critical components.



Galvanised products comprised 12% of product portfolio in FY 2016

Galvanised coils and sheets are manufactured at Vijaynagar, Vasind, Tarapur and Kalmeshwar works. During the year domestic sales volume of galvanised products increased by 45%


86% of galvanised products in India is consumed by Construction & Infra and Consumer Durables.

JSW Steel has been a pioneer in the Solar energy infra sector by upgrading the steel used in the solar panel base from galvanised to galvalume steel. JSW Galvos, the galvalume steel supplied to the solar sector comes with an extended warranty option, thereby increasing the quality of infrastructure in the country. The Company has been able to capture majority market share of the solar sector for galvalume, whereas the overall market share is over 45% for coated products.

In Automotive sector, approvals were received for 10 grades across 8 applications.




Colour Coated products comprised 4% of product portfolio in  FY 2016

Colour coated coils, sheets and profiles are manufactured in our Vasind, Tarapur and Kalmeshwar works. During the year domestic sales volume of colour coated products increased by  33%.


Colour coated products in India is almost fully consumed by Construction & Infra and Consumer Durables.

JSW Steel is the largest colour coated player in the domestic market with over 35% share. JSW Colouron+, JSW Colouron & JSW Pragati - the three brands of JSW Steel in the colour coated segment enjoy high market share in the individual home builder (IHB) segment.

The Company has also made substantial headway in the appliance sector, with approvals in place from several major consumer durables manufacturers in the country.

4.1.5 LONGS


Long products comprised 22% of product portfolio in FY 2016

Long products are manufactured at Vijaynagar, Dolvi and Salem works. During the year:

• Long product sales increased by 37%

• Domestic TMT sales increased by 86%

• Wire Rod domestic sales increased by 20%


Long product in India is largely consumed by Construction & Infra and Industrial & Engineering, with high value demand in Automotive sector also.

TMT and Alloy steel were two key areas of growth in the year. JSW Neosteel, the TMT brand of JSW Steel, has made inroads into villages, with substantial market share in South India.

JSW Neosteel was used in major projects in the country from Metro railway projects, ISRO projects, exbrssways & highways and critical atomic power projects.

JSW Steel - Salem works with a capacity of 1 million tonnes focusses on long products for Automotive sector and other specialized applications like Industrial & Engineering and Railways. The Company is the largest player in the long product - special steel automotive sector with over 25% share in the domestic market. The Company is the largest domestic producer of spring steels flats, alloy steel rounds & bars and alloy steel wire rods.

During the year JSW Steel has added 1.2 MTPA of long product finishing capacity at Vijayanagar and planning to commence commercial production of 1.4 MTPA of Bar Rod mill at Dolvi during Q1 of 2016-17.

With this, the share of long product production capacity has increased from 17% in FY 2014-15 to ~30%.

During the year, 12 new grades were approved for longs which included high value alloyed and micro alloyed steel for various components of engine, transmission and suspension.


JSW Steel is continuously increasing the share of value-added products to address its growing demand, de-commoditise the product basket and enhance sbrads. 35% of total sales in FY16 comprised of Value Added Special Products.

There is a strong focus on cold rolled, galvanised and galvanneal products for body panels of automobiles. The Company aims to continuously diversify and enrich its product mix, while capturing niche markets of colour coated products, electrical steel and tin plate steel.

Going forward, JSW Steel's focus will be twofold:

• Ramping up the new CAL-2 and electrical steel mill complex at Vijayanagar

• Further improving product mix with successful product approvals from auto and appliance manufacturers.

The Company is also setting up another service centre in Delhi after Pune under its joint venture - JSW MI Steel Service Centre. This new service centre is expected to further increase the serviceability to auto segment customers and enhance the value added products segment.

Electrical steel is a high value sector where the Company has commenced supplies during the year. Around 30% of the CRNO Electrical steel requirement in India is imported which the Company is targeting to substitute in the coming years.

The Company is now in a position to be a complete steel solutions provider to the electrical industry with all required steel products under its manufacturing capability - Cold rolled and Electrical steel from Vijaynagar works, Coated products from the Downstream plants and Long products from Salem works.

Appliance grade steel has ensured JSW Steel's mark in the high value colour coated steel applications. Appliance industry witnessed a good run last year, with certain segments like air-conditioner growing at 32%. With high market potential and considerable imports in this sector, the Company increased its supplies by more than 300% to the appliance manufacturers and its products have been approved by major appliance players, who comprise of 85% of total consumption of appliance grade steel in India.

The Company now has 20% market share in colour coated appliance segment and is working closely with appliance manufacturers to develop products to substitute imports, thereby making India self-reliant in this sector.

Solar structures also hold a lot of promise with the Government of India targeting 100 GW of capacity by the year 2022. The Company has developed a special grade galvanised product, customised for solar sector which will help increase the life of the structure further. The Company is already a leader in galvalume supplies to the sector with majority market share.

Automotive sector witnessed a lot of action in the year. Commercial supplies for galvanneal started during the year and approvals are in place from major customers. Currently, 50% of galvanneal is imported into India. The Company is working closely with the customers to indigenise the procurement which will enable just-in-time supplies.

High tensile Cold rolled products approval was received from major customers in the year. The Company has developed Advanced High Strength steel for automotive with upto 980 MPa strength. High tensile Cold rolled products are used for structural and crash components of the vehicle.

The Company has also started discussions with the technology supplier/s to build a new Tin Plate Complex at Tarapur.


FY 2015-16 was the year of shift to the domestic market. The domestic sales share increased from 74% in FY 2014-15 to 88% in FY 2015-16, with major thrust to the retail segment.

.3.1 OEM

This year, the focus was on increasing brsence in high value sectors, develop new grades and products and penetrate into new sub-sectors.

Hot rolled products saw increase in value added high strength steel supplied to automotive and yellow goods sectors. Major part of the volumes was tied up through supply contracts which acted effectively as a volume-risk mitigation strategy in an uncertain market.

In Cold rolled products, the products of the new CRM-II complex was approved by several major automotive customers, making both CRM-I as well as CRM-II complex supply ready for the automotive sector.

New grades were developed in coated steel which helped in deeper penetration in the market. The Company has developed a new grade in colour coated for support-less roofs which will help in import substitution for the application. Zero spangle, lead free product was developed addressing the needs of appliances, panels and ducting customers. The product is extremely environment friendly.

Longs witnessed capacity addition during the fiscal. Share of longs in the total sales increased from 16% to 22%. The Company has became a major player in TMT, supplying to major infra projects across the country.

During the year new grades were approved for longs which included high value alloyed and micro alloyed steel from JSW Salem works.

4.3.2 RETAIL

JSW Steel has been investing in brand building activities across product lines. Presently, 45% of retail sales are branded.

The Company continued it's focus on enhancing the domestic retail brsence, servicing newer sectors and developing new products for emerging needs.

The year was marked by increase in Retail sales by 75% y-o-y, which leaped domestic sales growth of 20% y-o-y.

Approximately 6,500 retail outlets, covering 75% districts pan India, have been set up to cater to small and rural customers. This has enabled JSW Steel to reach across the length and breadth of the country. JSW Steel plans to expand its business scope across 3,000 - 5,000 sub-districts.

Besides, the Company has been undertaking extensive marketing and branding initiatives. A 360 brand campaign was done in FY16 for JSW Neosteel including TV, radio, print, outdoor and below-the-line activities. Some special initiatives included brsence at events like Kumbh Mela and also extensive branding activity during festivals like Navratri and Ganesh Utsav.

Large scale advertising activities were undertaken using different platforms like TV, radio, cinema, newspaper, hoardings, shop boards and wall paintings. These initiatives have gone a long way in brand building.

JSW Shoppe and dealer distribution network

The JSW Shoppe and JSW Shoppe Connect network has been increasing every year. In FY16, the company had more than 560 branded outlets across the country.

Influencer engagement continued in FY 2015-16 and approx. 350 large meets were held by the company in various markets connecting to engineers, architects, masons and fabricators.

JSW Steel launched a relationship cum loyalty programme 'Sahyog', which integrates dealers, contractors, retailers, consultants and various channel partners with a vision to 'Grow Together'.

4.3.3 EXPORT

Exports were strategically re-aligned due to the volatility and sluggish demand in the international market.

The focus was on maintaining high percentage of value added products for higher realisations. Value added as percentage of overall exports was over 78% compared to ~ 49% in the brvious year.

Special grade steel was developed in galvanized products, which helped the Company to climb up the value chain.

In view of the sluggish global demand, the Company repositioned some of its supplies to favorable markets.

We commenced supplies of several new grades for critical applications in galvanised and colour coated steel, making inroads into new sectors.



The 12 MTPA Vijayanagar Works, the Company's flagship steel manufacturing plant, is India's first to use Corex technology to manufacture steel. Leveraging cutting-edge technologies, the plant has become one of the most efficient in terms of conversion cost globally.

The Vijayanagar Works is the first Indian plant with a large-scale, low grade iron ore beneficiation process. Its 4.62 MTPA coke manufacturing unit is also the largest such facility in a single location. The indigenously developed coke-oven plant, the first-of-its-kind in India, facilitates coke blending from diverse sources.

The Company has a manufacturing capacity of 9.2 MnT of pellets annually at Vijayanagar. The pellet production unit consists of India's first dry process pelletising plant, which is suited to soft iron in the Bellary-Hospet region.

The plant's CRM-II facility is India's largest auto-grade steel facility with a capacity of 2.3 MTPA. The facility will cater to requirements of both domestic and global auto majors. The Mill has the capability to produce high strength and advancedhigh strength steel, both in uncoated and coated (galvanized and gal annealed GI and GA) categories; and having width up to 1,870 mm. The CRM II facility also includes Continuous Annealing Lines.

Products such as slabs, billets, blooms, Hot Rolled (HR) coils and sheets, Cold Rolled Close Annealed (CRCA) coils and sheets, wire rods and bar rods, are customized to user applications; and contribute significantly to the organization’s profitability.

The capacity enhancement at the plant includes BF1 capacity augmentation from 0.9 to 1.9 MTPA, increasing process efficiencies in other blast furnaces as well, installation of new casters, modification of the converter shell to increase steel melting capacity and balance the product mix by installing a new 1.2 MTPA TMT bar mill. Besides, an Electrical Steel Complex at CRM-1 to produce 0.2 MTPA of Cold Rolled Non Grain Oriented (CRNGO) products along with annealing and coating lines (ACL) also started operating during the year.

FY 2015-16 Highlights

• Blast Furnace (BF) 1 was reconstructed, enhancing capacity to 1.9 MTPA.

• BF 2 increased oxygen availability from 6% to 8%, which increased productivity.

• Revamping of all converters of Steel Melt Shop (SMS) 2 was completed in 161 days resulting in enhanced production capacity.

• North yard hot metal entry was successfully commissioned in February 2016, leading to production enhancement.

• A total of 89 steel grades were developed.


• Platts Global Metals Award. (Industry Leadership)

• Porter Prize for Creating Shared Value. Porter Prize of Leveraging Unique Activities - weathering the iron ore crisis.

• CII-EXIM Bank Business Excellence Award - 2015 Awarded by Confederation Indian Industries (CII): Commendation Certificate for Significant Achievement.

• National Sustainability Award - 2015: First Prize amongst the Integrated Steel Plants Category by Indian Institute of Metals.

• CII-ITC Sustainability Award 2014: Awarded for Outstanding Accomplishment in Category F.

• Steel Minister's Trophy for 2013-14.

Way forward

• Augmentation of casting capacities of SMS1 and SMS2 to optimise product mix.

• Stabilisation of Electrical steel production, its service centre and product approvals with various OEMs.



The 5.0 MTPA integrated steel plant at Dolvi is advantageously located on the western coast of Maharashtra. It is located close to a captive port and a jetty beside the complex can handle cargo of up to 15 MTPA. As part of backward integration, a pellet plant and a coke oven has been added to the complex through its 100% subsidiary Amba River Coke Limited. The Dolvi plant is India's first to adopt a combination of Conarc technology for steelmaking and compact strip production (CSP) for producing hot rolled coils. It caters to a range of industries within the automotive, industrial and consumer durables sectors.

Blast furnace capacity has been enhanced to 3.5 MTPA. New 1.5 MTPA Billet caster and 1.4 MTPA Bar Mill have been set up. In addition, a second Sinter plant of 2.5 MTPA capacity has also been set up, to meet the enhanced sinter requirement of revamped blast furnace.

The Company's expansion at Dolvi will ensure diversification in terms of products and regions. The manufacture of long products at this plant will result in enhanced market access in western India and de-risking of supply chain disruptions. JSW Steel has now emerged as the only primary producer of long products in western India.

FY 2015-16 Highlights

• Capacity expansion in Phase1 was increased from 3.3 to 5 MTPA included the following:

• Blast furnace modification from 2 to 3.5 MTPA through the single block method, used for the first time in India.

• Sinter Plant 2 of 2.5 MTPA, Billet Caster of 1.5 MTPA and Bar Mill of 1.4 MTPA capacities installed.

• De-bottlenecking of SMS and up-gradation in caster and mill (Thin slab caster route).

•Second gallery of cross-country conveyor, installed with capacity to house four conveyors. One conveyor installed and commissioned,

• Rotary feeder installed at pellet plant for coke and lime, which resulted in reduced spillage and emissions.

• HTQ (high temp quenching) system was installed to improve the effectiveness of the Gas Cleaning Plant at  SMS.


• Certificate of apbrciation for achieving maximum overall improvement in 2013-14. The Dolvi plant secured 3rd rank in Prime Minister's Trophy 2013-14 competitions.

• Received Environment Greentech award in the Gold category.

Way forward

• Stabilising operations of the newly installed production facilities under capacity expansion.

• Implementing environment related projects aimed at reducing carbon footprint.


The Salem Works manufactures customised special steel long products for use in the automobile and energy sectors. It is India's largest special steel manufacturing facility with 1 MTPA capacity.


• BF 2 capital repair was completed and commissioned successfully, which helped to reduce fuel rate by 12 kg/ THM and increased hot blast temperature from 1,060 to 1,175° C.

• The oil reheating furnace was replaced by 100 TPH BF gas fired furnace.

• For the first time in India, an online defect detection system for the inspection of coils at BRM was commissioned.

• High brssure descaling system (250 bar) was installed to improve the surface quality of rolled product.

• Hot Saw No. 3 at Blooming Mill was installed to improve the quality of cut ends in final products.

• 15 new steel grades were developed and customised.


• Won the second prize in IIM Sustainability Award under the alloy steel category.

• Received the commendation certificate for strong commitment to excel in CII-EXIM Business Excellence Award.

• Received the performance excellence trophy in the Ramakrishna Bajaj National quality award.

• Won the silver award at Greentech CSR Award.

• Platinum Award in Ratriyavibhushan CSR Award

• Received par excellence and distinguished award from National Convention and Quality Concepts (NCQC).

• Won the silver award in the six sigma category at the International Convention on Quality Control Chapter (ICQCC).

• Won two gold, three silver and 1 bronze in State Level Convention on Quality Circle (SLCQC).

Way forward

• Additional Caster (Caster 3) for SMS will be installed.

• Conversion of EOF-1 capacity from 45 to 65 tonnes.

• Downstream value addition through Annealing lines for BRM products will be undertaken.

• I nstallation of Waste Heat Recovery Boiler (WHRB 5) to reduce energy consumption.

• 30 MW steam turbine generators with auxiliaries will be installed.

The Company's gross turnover in FY 2015-16 declined by 19% from Rs. 49,658 crores to Rs. 40,354 crores mainly due to a decline in realisations, inspite of increase of 1 lacs tonnes of volume of sales. The operating EBITDA for the year was at Rs. 5,723 crores, lower by 35% over last year, and EBIDTA margin stood at 15.6%. EBIDTA is lower due to reduction in sales realisation in line with international prices and import of steel products at brdatory prices into India. However lower prices of Iron ore and Coal and operational efficiencies has mitigated the impact of lower realisation to some extent.

The Company registered a net loss after tax of Rs. 3,498 crores, primarily driven by provision for diminution in value of investments and loans and advances in 3Q FY 2016.

FY 2015-16 was particularly challenging for the Steel Industry, due to structural global over supply and fall in demand. The global steel demand was weak with lower investment activities and weak manufacturing across most regions. As the steel surplus countries resorted to dumping in other countries, the realisations were impacted severely. More over the global uncertainties and volatility has significantly impacted the commodities market.

The domestic steel industry continues to suffer from rising imports - especially from China, Japan and South Korea. The domestic steel industry is grappling with headwinds of an insipid demand, excess supply and pricing brssure, driven by a surge in imports at brdatory pricing.

In this scenario, JSW's performance was relatively strong with improvement in absolute volumes in domestic market. The sales volume stood at 12.13 million tons up by 1% as compared to the brvious year. JSW reduced the export dependency and focussed on domestic market to protect the fall in realisations. This was driven by a focus on value-added and branded products in addition to developing existing and new markets.

The other operating revenues was lower by Rs. 231 crores as compared to the brvious year due to lower sales tax incentives, in view of the decline in realisations and one-off write back of liabilities during the brvious year.

Highlights FY 2015-16

• Increase in retail sales by 75% helped domestic sales to grow by 20%.

• Product mix improved with value-added products sales, reaching 35% of total sales, despite lower exports.

• TMT sales grew 86%.

• CRCA sales grew 41%.

Capital employed

Total capital employed decreased by 5% from Rs. 56,825 crores as on March 31, 2015 to Rs. 54,176 crores as on March 31, 2016.

Return on capital employed is 6.27% for FY 2015-16. This is expected to improve over the next year, because the 25% expanded capacity (from 14.3 MTPA to 18 MTPA) will start earning returns.

Own funds

Net worth decreased from Rs. 25,725 crores as on March 31, 2015 to Rs. 21,753 crores as on March 31, 2016; as the Company has made provisions relating to certain subsidiaries for diminution in value of investments, other than temporary, in the value of certain overseas investments, loans and advances; and towards certain guarantees for borrowing by the subsidiaries, which has been disclosed as exceptional items in books.

The book value per share was Rs. 868 as on March 31, 2016 against Rs. 1,033 as on March 31, 2015.

Reserves: Reserves and surplus decreased from Rs. 24,657 crores as on March 31, 2015 to Rs. 20,686 crores as on March 31, 2016.


The Company has reported a consolidated gross turnover, net turnover, operating EBIDTA and net loss after tax of Rs. 45,642 crores, Rs. 41,217 crores, Rs. 6,073 crores and Rs. 742 crores, respectively. The Company's consolidated financial statements include the financial performance of the following Subsidiaries, Joint Ventures and Associates.


The Company's Research and Development (R&D) initiatives comprise: process development and improvements, energy optimisation, product development and customisation, effective waste utilisation and conservation of natural resources

JSW Steel's R&D division is actively involved in industry-academic partnerships; and has initiated multiple collaborative projects with leading academic and research institutes in India like, CSIR-NML Jamshedpur, IIT Bombay, IIT

Madras, IIT Kharagpur, IISc Bangalore, NIT Surathkal, NCCBM Ballabhgarh, CSIR-IMMT Bhubaneswar and BITS Pilani. In addition, the Company initiated an international collaborative research programme with BASF, Germany, to develop special purpose reagents for iron ore beneficiation. An MoU for this was signed in September 2015.

The Way Ahead

At JSW Steel, the focus of the R&D division is to aid continuous performance improvement, value creation and cost reduction through innovative research (relating to existing operations and strategic business requirements).

The Division's focus for the next three years, therefore, will be to:

• Develop reagents for improving the efficiency of floatation process, so that it can handle high alumina ores.

• Develop high strength steel with 1,300 MPA for automotive applications.

• Develop fluidised bed reduction roasting process for slimes and low grade iron ores for maximising iron recovery.

• Develop processes that enable energy conservation, waste utilisation, water conservation and reduce overall harmful impact on the environment.

• Develop new products/grades for upcoming applications.


Iron ore and coal prices have witnessed large-scale volatility in recent times. This made sourcing and keeping costs under control a significant challenge in the last fiscal. The Company's consistent focus and strategy to diversify raw material sourcing has provided us the desired result, especially during the turbulent times in the commodities market. The Company has been able to meet its raw material requirement without compromising on quality or production schedules.


Iron ore prices in international markets plunged to a record low in the last fiscal. To sustain the requirement for iron ore, the Company strategised to optimally source it, from different regions. Moreover, this year commodity prices were also partially hedged, de-risking the volatility associated with imports.


A basket of contract provisions linked to market with options and continuous buying across troughs and peaks of a business cycle are in place to reduce the impact of volatility in price. Concerted efforts towards sourcing from different geographies and suppliers over past few years is being followed to have desired results without compromising the production schedules; qualitative or quantitative.


Another significant cost attached to bulk raw material is logistics. A focused drive across plants was initiated by JSW Steel during the year to optimise costs from customised solutions. The initiative has already started yielding results to optimise shipping freight. The development of a cape compliant port to handle imported cargo added to the Company's efficiency and cost competitiveness.


JSW Steel currently does not enjoy as much access to captive raw material resources like some of its peers. However, the Company is working to enhance its raw material self-sufficiency. To achieve this, it continues to explore opportunities, both within and outside India.

The new MMDR Amendment Act has called for a level playing field for industry players and transparent allocation process of raw materials through competitive bidding. JSW Steel will focus on this opportunity to enhance raw material security, going forward.

Significant developments on the raw materials front include:

1. Secured the 'Moitra' coking coal block via an auction process. This mine has total extractable coal reserve of around 30 MnT, is situated at Jharkhand.

2. Intends to participate in the forthcoming auctions of C-category iron ore mines in Karnataka.

3. Plans to participate in the auction iron ore mines in few others states as well, to fulfil the Company's goal of self-sufficiency on the raw materials front.



At JSW Steel, energy management plays a pivotal role towards the successful functioning of plant operations. The energy management procedure involves collection and recycling of hot air and processing of gases to minimise fossil fuel consumption. Considering the volatility in fuel costs, JSW Steel has implemented a combrhensive energy management programme, encompassing steam, fuel, special gases and hot air.



• Consumption of DRI gas in gas mixing station to increase captive power generation.

• Flaring of Corex gas was reduced to 1.4% and was made possible by parallel enabling high brssure in the Corex and improved utilisation in Direct Reduced Iron plant. Gas utilisation in BF gas was optimised at 96.8% by utilising surplus BF gas in process steam boilers and in power plants.

DOLVI / Dolvi

• Achieved 22,000 Nm3/hour usage of coke oven gas to produce DRI at Sponge Iron Plant, which is nearly 20% of the gas requirement.



•Blast Furnace Gas (BFG) flaring has been reduced by 5.5%.

• Replacing conventional lights with LED lights at HSM area for Energy Savings.

• Achieved the COG utilisation 99.8%.

• Revamping of waste heat recovery Boiler of Sinter-I, resulting in increase of Steam generation.


• Coal handling plants running duration was reduced by avoiding idle running and non-value added running.

• Power consumption was reduced in chiller unit through process optimisation and by installation of drives in cooling water system.

• Coke consumption was reduced in BF 2 by increasing the hot blast temperature.

• IPower saving through coating of pump casing.

The way forward


• Installation and commissioning of 150 TPH boiler at BF-1.

• Plan to convert its LPG station electric vaporisers to steam vaporisers.

• Plans to install a turbine at the 60 TPH boiler to offset steam purchase and generate power, utilising the differential brssure.


• Installation of Waste heat recovery Boiler in Sinter-II, generation of 14 tons/hr steam at low brssure.

• Installation of BF gas holder to reduce the gas flaring.

• Running both coke oven batteries on Mixed gas for saving COG, which inturn will reduce NG requirement.


• Installation of waste heat recovery boiler at coke oven  battery No. 2.

• Drive for PCI exhaust fan.


JSW Steel follows the Committee of Sponsoring Organization (COSO) framework of risk management that ensures timely anticipation, impact assessment, prioritization and response to risks affecting organizational objectives.

The Company follows a combination of top down and bottom up approach, ensuring foresight and insight with regards to risks before they arise or sbrad.

The risk management oversight framework at JSW Steel comprises:

• Board of Directors

• Risk Committee Directors (four independent and all executive)

• Corporate Risk Committee (Chaired by the JMD and attended by unit and corporate function heads)



JSW Steel has emerged as a leading steel manufacturer in India through a deep conviction in its capabilities and persistent efforts. The Company's phenomenal growth, over the years, is a testament of the dedication and perseverance of every JSWite.

JSW Steel attributes its success to its people and is proud to have a robust talent pool with varied skill sets in engineering, management and finance, CSR, HR and other domains.

The rich experience of its leadership, coupled with the exuberance of its young workforce has helped create a vibrant and collaborative environment at the organisation.


A multi-pronged approach in organisational development is in place to attract, retain and develop people. JSW Steel believes in infusing the right talent across the organisational hierarchy; and as a sustainable measure, the Company believes in inducting young workforce.

The structured JSW Summer Internship Programme (SIP) and Graduate Rotation Programme (GRP) are designed to identify and groom future leaders for the Company.

Every year talented undergraduate interns are recruited from brmiere institutes across India. They are assigned specific projects that add value to the business/systems and processes. These youngsters go through a rigorous training for two months. At the end of their stint, they are evaluated through a robust assessment process; and the best performing interns are offered employment under GRP.

In its endeavour to retain, develop and build home-grown talent, JSW Steel has also introduced the Fast Track Programme (FTP) for the high-performing and high potential employees across grades.

Similarly, Project UTKARKH has been initiated at Vijayanagar for developing a competency framework for the organisation to assess capabilities and brpare individual development plans. The project focuses on the identification of competencies of middle and senior management using the framework.


A new mentoring initiative called 'Gurucool' has been implemented to engage new recruits and help them in their professional and personal journey at JSW Steel. This initiative ensures that new employees are gainfully engaged and properly groomed to inculcate a culture of triumph through teamwork.

'Gurucool' is a strategic approach to develop an employee (mentee). Senior leaders are being identified, trained and certified to be a coach at the workplace. In the first phase, 10 leaders have been certified as coaches.


JSW Steel has devised various engagement frameworks to improve and strengthen employee engagement.

A few such initiatives include:


A four-month programme, 'Prerana', empowers young engineers with the requisite technical and behavioural skills, before deploying them at the workplace.


An online library has been set up in collaboration with 'Kwench'. This library can be accessed by employees and their families across different locations and businesses.


This employee suggestion scheme provides a solid platform for employees to engage, participate and contribute to the process improvement, which is expected to result in significant time and cost savings.

Training and development

The new and existing employees are trained through various in-house training programmes and are made ready to support the growth trajectory of JSW Steel. The Company also runs a large number of training programmes at its plant locations, with internal faculties to impart technical and behavioural training. The programmes cover employees as well as associates for improving productivity and foster a safe working environment.

The Company provides multiple learning and development opportunities to its employees to acquire new skills, knowledge and to enhance their capabilities. Some of the efforts in this direction are:

• Over 500 technical and over 200 behavioural training programmes were conducted in-house by both internal and external faculty.

• Tie ups with brmier institutes for employee education. To inculcate a culture of continuous learning among employees, JSW Steel has tied up for an off-campus B.S. course with BITS Pilani, M. Tech with IIT Mumbai and Post Diploma in Industrial Safety with RGIST.

• Talent acquisition through industrial projects is a programme under which students (pursuing degrees in engineering and business management from brmier technology institutes and business schools) are encouraged to take up internships and projects with JSW Steel. The Company's manufacturing and other functional departments priorities projects to offer to the selected students' group. The objective is to evaluate their knowledge application, innovative approach, teamwork and professional temperament to facilitate measurable outcomes, leading to br-placement offers to selected students

Capability building

The Company has commenced a series of advanced interventions for employees across the organization. Some specific interventions introduced are Great Managers, Presentation Excellence, Breakthrough Communications, Great Leaders and Workplace Coaching for Leaders, among others. Additionally, the Company is making a shift in the learning and development space by moving to the e-learning platform. The aim is to cover the entire workforce in a phased manner.

Empowerment of women

JSW Steel conducts a series of initiatives to maintain an appropriate gender balance in its workforce. It also helps create legal awareness for women employees and has a zero-tolerance approach towards sexual harassment at the workplace. Women employees are also imparted special trainings. These initiatives reflect the Company's commitment to empowerment of women.

JSW Steel is an equal opportunity employer and strives to increase the number of positions held by women employees every year. Special programmes on personality development, managerial development and leadership development are being organised for grooming and enhancing the competencies of women employees for positions higher up the hierarchy.

There are sessions conducted for women to make them aware of legal acts, such as the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Protection of Human Rights Act, 1993.

Women also participate in special training programmes like Life Enrichment, First Aid, and Life Etiquette Training programme, among others.

Rewards and recognition

The rewards and recognition mechanism continues to evolve at JSW Steel to encourage innovation at work. The idea is to strengthen a culture of creativity and innovation through the use of various mechanisms to reward and recognise employees, either as an individual or as part of a team, for top-notch performance. This facilitates the Company's pursuit of its strategic goals and objectives.

In addition to the imbrssive array of awards ('Best Employee', 'Exemplary Work', 'Best Suggestion', 'Best Safety Man', 'Bravery and Courage' award, 'Best QC', 'Intellectual Property Rights', Award for 'Best Contractor'), a new award ('Quarterly Departmental/ Cluster Champions') has been added.

The quarterly award of cluster champion is given in recognition of self-initiated improvements, best safety practices, troubleshooting skills and innovation and creativity. Champions are selected every quarter and their photographs are displayed in prominent areas of their department.


JSW has already embarked on the digitization journey. The entire organization is now on SAP platform encompassing ERP, Supply Chain Management (SCM) and Business Intelligence BI) systems. This has enhanced the Company's ability to plan with trustworthy data, manufacture on-spec quality products and better on-time delivery compliance.


• During the year, the Company improved the Information Technology - Operations Technology (IT-OT) integration spanning across L1 to L4 automation systems.

• Better order-to-cash and plan-to-produce cycles through seamless data exchange.

• To cover the entire value chain, the Company has started extending information systems (as per proper access authorizations) to customers, distributors and retailers.


• As a next step on the digitization route, the Company is designing enterprise architecture to embrace the next generation Industry 4.0 architecture.

• The size and complexity of data, along with the depth and breadth at each layer of automation, requires a smart footprint of L5 - Business Intelligence layer. It will collect, collate, read, infer and analyses data to accelerate and amplify the ability to take informed decisions.

• The Company is also embarking upon the implementation of SAP Business Planning & Consolidation (BPC) system, Governance Risk & Compliance (GRC) and Mobility solutions.

• The revamped website ensures improved viewer accessibility and excellent reader experience. Overall, adding value to the Company's image and brand equity.

• In FY 2016-17, the intranet will be overhauled with a view to improve employee collaboration and knowledge management.


Certain statements in this release concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition within Steel Industry including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our internal operations, reduced demand for steel, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which - has made strategic investments, withdrawal of fiscal governmental incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. The Company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the Company.

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