Morgan Stanley's India research team expects Coal India Limited and JSW Steel to report comparatively strong results in the forthcoming earnings season, with Jindal Steel anticipated to trail its peers.
Production and demand backdrop
The bank notes that India’s crude steel production likely expanded in double digits year-over-year in the quarter under review. Joint Plant Committee data for January-February pointed to growth of about 11% year-over-year, slightly ahead of the roughly 10% year-over-year rise recorded in the third quarter of fiscal 2026. Finished steel demand improved markedly, with growth estimated at around 8-9% year-over-year during the quarter, up from approximately 4% year-over-year in the prior quarter. Morgan Stanley links this demand recovery to higher construction activity and government spending. SAIL’s disclosed volume numbers showed growth of about 12% year-over-year.
Company-level volume expectations
- Morgan Stanley projects Jindal Steel volumes to increase by roughly 15% year-over-year.
- Tata Steel India is expected to record about 11% year-over-year volume growth.
- JSW Steel’s Indian business is forecast to grow around 6% year-over-year.
Domestic prices and realizations
The domestic steel price environment strengthened during the quarter, supported by improving demand and the extension of safeguard duty. Hot-rolled coil (HRC) prices rose about 14% quarter-over-quarter to Rs6,600 per tonne, while rebar prices increased roughly 15% quarter-over-quarter to Rs6,200 per tonne. On average, Morgan Stanley expects a domestic net sales realization expansion of approximately Rs4,900 per tonne across its coverage universe. The bank identifies SAIL as the largest beneficiary of this realization uplift, with an estimated increase of Rs6,500 per tonne, followed by JSW Steel at Rs6,000 per tonne. Tata Steel and Jindal Steel are expected to see more modest realization gains of Rs2,700 per tonne and Rs3,000 per tonne, respectively.
Raw materials and cost pressure
Raw material costs rose over the quarter. NMDC prices were up about 4% quarter-over-quarter, roughly Rs200 per tonne. Coking coal prices increased sharply after weather-related supply disruptions in Australia; Peak Downs Region hard coking coal prices climbed about 18% quarter-over-quarter. Morgan Stanley reports average coking coal prices moved from about $186 per tonne in the second quarter of fiscal 2026 to roughly $205 per tonne in the third quarter and to approximately $241 per tonne in the fourth quarter.
Despite the raw material inflation, the bank expects covered companies to see domestic EBITDA per tonne expand by around Rs3,000 per tonne to approximately Rs11,300 per tonne.
Coal India outlook
Coal India Limited disclosed production up around 1% year-over-year and dispatches down about 2% year-over-year. Morgan Stanley anticipates Coal India’s realizations to increase by roughly 7% year-over-year, with e-auction premiums improving to around 71% from about 62% in the previous quarter. The desk forecasts overall EBITDA of approximately Rs119 billion for Coal India, compared with about Rs93 billion in the last quarter and roughly Rs118 billion in the fourth quarter of fiscal 2025. Profit after tax is estimated at about Rs102 billion.
Implications
Morgan Stanley’s views point to a steel sector experiencing stronger volumes and price-led realization gains, while facing cost headwinds from higher raw-material prices. Within this mixed environment, Coal India and JSW Steel are singled out as likely outperformers, and Jindal Steel as likely underperforming peers in the upcoming results.
Note: This article presents Morgan Stanley India Desk forecasts and company-disclosed figures as reported. Where available, quarter-on-quarter and year-on-year changes are shown as stated by the source.