JSW Steel joins hand with Japan's JFE Steel for steel plant in Karnataka, stock falls marginally

JSW Steel Limited on Tuesday announced the establishment of a 50:50 JV with JFE Steel Corporation, Japan, for the production of Grain Oriented Electrical Steel in India. The new company JSW Electrical Steel Private Limited, to be renamed JSW JFE Electrical Steel Private Limited, will have its manufacturing base in Bellary, Karnataka, and will be set up with a planned investment of Rs 5,500 crore the company said in a stock exchange filing on Tuesday

The facility is targeting to commence production in the fiscal year 2027 and plans to further expand its capacity to meet the growing market demand for grain-oriented electrical steel in India. Grain-oriented electrical steel plays a pivotal role in the production of energy-efficient transformers. Whether in laminated, wound, or punched sheet form, it serves as the essential core material for distribution transformers, power transformers, and small transformers.

"The collaboration is a milestone development, as it would be the first company to have end-toend manufacturing of Grain Oriented Electrical Steel products in India. The JV Company aspires to cater to the surging domestic demand for Grain Oriented Electrical Steel and contribute significantly to the country's energy infrastructure," JSW Steel said in a statement.

At 12.40 pm, JSW Steel shares were trading at Rs 806.65, down by 0.46 per cent.

JSW Steel reported a consolidated net profit of Rs 2,450 crore in the December quarter of 2023-24. The net profit rose around fivefold in Q3 FY24 compared to the net profit of Rs 474 crore in the corresponding period of FY23. Its income rose to Rs 42,134 crore from Rs 39,322 crore year-on-year. "The strong performance was driven by capacity utilisation rising to 94 per cent during the quarter vs 89 per cent in Q2 FY24 at the Indian operations," the company said in a statement.

Its steel sales grew 7% to six million tonnes, while crude steel production for the quarter jumped 12% from a year earlier. Revenue from operations rose 7.2% to Rs 41,940 crore.

Earlier, the JSW Group has signed a memorandum of understanding (MoU) with the Odisha government for electric vehicle (EV) and its battery manufacturing project at Cuttack and Paradip. The company will invest Rs 40,000 crore for the mega manufacturing plants.

The group plans to invest Rs 25,000 crore in Cuttack for the electric vehicle and its battery manufacturing complex, while the rest Rs 15,000 crore will be invested in the EV components manufacturing facility in Paradip.