CAPEX is a crucial indicator of a company’s growth strategy and commitment to improving its operational efficiency and competitiveness. By analysing the CAPEX figures, investors can assess the companies long-term vision and their ability to capitalise on market opportunities.
1. Jindal Stainless
India’s leading stainless-steel manufacturer, Jindal Stainless, had a consolidated annual turnover of INR 38,562 crore (USD 4.7 billion) in FY24 and is ramping up its facilities to reach 4.2 million tonnes of annual melt capacity in FY27. It has 16 stainless steel manufacturing and processing facilities in India and abroad, including in Spain and Indonesia, and a worldwide network in 12 countries, as of March 2024. In India, there are ten sales offices and six service centres, as of March 2024. The company’s product range includes stainless steel slabs, blooms, coils, plates, sheets, precision strips, wire rods, rebars, blade steel, and coin blanks.
CAPEX:
Jindal Stainless’s capital expenditure (CAPEX) increased from INR 1,640 crore in 2023 to INR 3,727 crore in 2024, a year-over-year growth of 127%. This significant investment in capacity expansion and modernisation reflects the company’s strategic focus on enhancing its operational efficiency and cost competitiveness.
Financials:
Jindal Stainless has delivered a robust financial performance over the past five years, with a stock price CAGR of 83% and an average ROE of 23%. The company’s sales CAGR for the same period stands at 23%.
2. JSW Steel Ltd.
JSW Steel Ltd is one of India’s leading integrated steel manufacturers, recognised for its commitment to quality and innovation. The company operates a manufacturing capacity of 35.7 million tonnes per annum (MTPA) in India and the USA, with plans to increase capacity to 38.5 MTPA by FY25. JSW Steel has major manufacturing plants located in Karnataka, Tamil Nadu, and Maharashtra, including the largest single-location steel-producing facility at Vijayanagar. The company offers a wide range of steel products, including hot-rolled (HR) and cold-rolled (CR) coils and sheets, galvanised and galvalume products, thermomechanically treated (TMT) bars, wire rods, and special steel bars. JSW Steel has a global presence in over 100 countries and strategic partnerships with global leaders like JFE Steel of Japan to enhance its production capabilities. The company is also recognised for its environmental practices, including being part of the S&P Dow Jones Sustainability Index.
CAPEX:
JSW Steel’s capital expenditure (CAPEX) increased from INR 12,221 crore in 2023 to INR 15,596 crore in 2024, a year-over-year growth of 27.61%.
Financials:
JSW Steel has delivered a strong financial performance over the past five years, with a stock price CAGR of 32% and an average ROE of 17%. The company’s sales CAGR for the same period stands at 16%. In the recent quarters, JSW Steel’s revenue declined from INR 44,584 crore in Q1 FY25 to INR 39,684 crore in Q2 FY25, a negative change of 11%. Similarly, the company’s profit after tax (PAT) decreased from INR 2,773 crore in Q1 FY25 to INR 404 crore in Q2 FY25, a negative change of 85%.
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3. Tata Steel Ltd.
Tata Steel Ltd is one of the largest steel producers in the world, with a diversified portfolio and a strong global presence. The company operates an annual crude steel capacity of 35 million tonnes per annum (MTPA) across manufacturing facilities in 26 countries, with major plants located in India, the Netherlands, and the United Kingdom. Tata Steel’s largest plant is situated in Jamshedpur, Jharkhand, with a capacity of 10 MTPA. The company’s product portfolio includes a wide range of steel products catering to various industries, such as hot-rolled (HR) and cold-rolled (CR) products, galvanised steel, ferro-alloys, tubes, wires, and speciality steel for the automotive and construction sectors. Tata Steel is known for its geographical diversification, integrated operations from mining to manufacturing and marketing, and strong focus on sustainable practices, including its commitment to achieving net-zero emissions by 2045.
CAPEX:
Tata Steel’s capital expenditure (CAPEX) increased from INR 11,865 crore in 2023 to INR 14,724 crore in 2024, a year-over-year growth of 24.09%.
Financials:
Tata Steel has delivered a strong financial performance over the past five years, with a stock price CAGR of 31% and an average ROE of 14%. The company’s sales CAGR for the same period stands at 8%. In the recent quarters, Tata Steel’s revenue declined marginally from INR 54,771 crore in Q1 FY25 to INR 53,905 crore in Q2 FY25, a change of 1.5%. Similarly, the company’s profit after tax (PAT) decreased from INR 919 crore in Q1 FY25 to INR 759 crore in Q2 FY25, a decline of 17.4%.
4. Steel Authority of India Ltd (SAIL)
Steel Authority of India Ltd (SAIL) is one of the largest state-owned steel producers in India, operating several integrated steel plants. SAIL has an annual production capacity of approximately 18.29 million metric tonnes of crude steel. The company operates five major integrated steel plants located in Bhilai (Chhattisgarh), Bokaro (Jharkhand), Durgapur (West Bengal), Rourkela (Odisha), and Burnpur (West Bengal). Additionally, SAIL has special steel plants in Salem (Tamil Nadu), Durgapur (West Bengal), and Bhadravathi (Karnataka). SAIL’s product portfolio includes a diverse range of steel products, such as hot and cold rolled sheets and coils, galvanised sheets, structural steel, railway products, stainless steel, and ferro-alloys. As a Maharatna company, SAIL benefits from significant operational autonomy and resource security, with a substantial portion of its raw material requirements met through captive mines. The company also has a dedicated R&D centre focused on innovation and technological advancements.
CAPEX:
SAIL’s capital expenditure (CAPEX) decreased from INR 4,691 crore in 2023 to INR 3,583 crore in 2024, a year-over-year decline of 23.61%. This reduction in CAPEX reflects the company’s focus on optimising its capital allocation and aligning with its growth strategy.
Financials:
SAIL has delivered a strong financial performance over the past five years, with a stock price CAGR of 26% and an average ROE of 10%. The company’s sales CAGR for the same period stands at 9%. In the recent quarters, SAIL’s revenue increased from INR 23,998 crore in Q1 FY25 to INR 24,675 crore in Q2 FY25, a change of 2.8%. However, the company’s profit after tax (PAT) increased significantly from INR 82 crore in Q2 FY25 to INR 897 crore in Q1 FY25, a change of 993%.
Written BY Fazal Ul Vahab C H
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