JSW Steel to review capex cut after two quarters

Due to lower cash generation in the June quarter, JSW Steel has reduced capex by approximately Rs 5,000 crore for the current fiscal year. The company plans to review this decision later. But there won't be any adjustments to its long-term plans.

The diversified JSW Group's flagship company, JSW Steel, had previously set aside a capex budget of Rs 20,000 crore for the current fiscal year, up from Rs 15,000 crore spent in FY22. However, this was cut to Rs 15,000 crore, bringing it down to last year's levels.

“The cash generation during the first quarter was much lower than what was planned. We are now putting on hold discretionary capex and that for special projects, while there will be no changes in normal capex and our long-term investment plans for next two years. We will review this cut two quarters down the line,” JSW Steel joint managing director & group CFO Seshagiri Rao MVS told FE in an interview.

Additionally, the company was considering increasing its production capacity in India by an additional 10 million tonnes annually (mtpa), bringing it to 37 mtpa by FY25. Internal accruals were to be primarily used to finance this.

“There is no change in growth capex,” he said, referring to expansion of production capacities. While there are no planned shutdowns for the year, JSW Steel would continue with the temporary closure of certain facilities of Monnet Ispat & Energy’s (now JSW Ispat Special Products) plant for “some more time”.