Expect export duty rollback, margin normalisation by Q3FY23: JSW Steel MD

JSW Steel Joint Managing Director and CFO Seshagiri Rao.

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26 Aug, 2025 12:21

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JSW Steel Ltd expects the easing of pressure on margins and expects the government to roll back the recently imposed export duty on steel by the third quarter of the financial year 2022-2023, Joint Managing Director and CFO Seshagiri Rao told Moneycontrol in an interview.

But Rao expects the pressure on margin to continue in the second quarter of the fiscal due to high-cost inventory.

“While Q1 was marred by several one-offs, Q2 might be hit by higher-cost inventory. But one could expect margins to be normalised and export duty imposition to be reviewed by the government by Q3,” Rao said.

On May 22, India announced an increase in duty on exports of iron ore, up to 50 percent from 30 percent, and imposed an export duty of up to 15 percent on some steel intermediaries.  The prices have been falling since the imposition of export duty and reached a level sub Rs 60,000 per tonne for the month of July as against Rs 68,700 a tonne for the quarter ended June 30, 2021.

Margin normalisation from Q3FY23 onwards

The joint managing director also added that he expects standalone EBITDA (earnings before interest, taxes, depreciation, and amortization) per tonne to be better than the previous five-year average of Rs 8000-9,000 per tonne in the ongoing metal cycle (which usually lasts for five years).  Commodity and metal price cycles are extended periods during which commodity prices are well above or below their long-run trend (usually 5 years or so)

JSW Steel’s standalone EBITDA per tonne of Rs 8,300 in the June quarter was at an eight-quarter low. Higher coking coal and power costs, inventory markdown, and mark-to-market loss on foreign exchange loans weighed on the company’s performance, according to global brokerage firm Jefferies.