What the company does
Jayaswal Neco Industries Ltd (JNIL) is an integrated steel producer engaged in manufacturing pig iron, sponge iron, billets, rolled products and ferro alloys, supported by captive mining and power assets. Its operations are concentrated in Chhattisgarh and Maharashtra, where the company runs blast furnaces, steel melting shops, rolling mills, coke ovens and energy units. JNIL also owns and operates captive iron ore mines and coal blocks, which supply a significant portion of its raw-material requirements. This integrated structure gives the company a cost advantage over non-integrated steelmakers and helps stabilise margins during commodity cycles.
The bankruptcy that was avoided
The company’s financial distress traces back to the steel sector downturn of the early and mid-2010s, when the industry faced a severe combination of overcapacity, high debt and collapsing prices. The company had undertaken major expansions in mining and steelmaking capacity in the years prior, funded largely through borrowed capital.
When steel prices fell sharply and demand weakened, revenues failed to keep pace with rising interest and operating costs. High leverage, large capital work-in-progress and cost overruns began to strain liquidity. The company also struggled with delays in environmental clearances and regulatory approvals for mining operations, affecting the supply of raw materials and adding to cash flow pressure.Banks classified their loans as non-performing as repayment capacity deteriorated. By 2017–18, Jayaswal Neco had become one of the many stressed steel companies pushed towards insolvency under the Insolvency and Bankruptcy Code (IBC).The company fought a four-year legal battle to thwart bankruptcy. It was in the second list of 28 companies issued by the RBI in December 2017. RBI wanted lenders to approach the bankruptcy court to resolve these companies. Although SBI had filed a petition, Jayaswal Neco was never admitted for insolvency. Later, the Supreme Court allowed the withdrawal of the insolvency petition.
A rebound
Jayaswal Neco avoided liquidation through a combination of debt restructuring, improved sector conditions and operational reforms. Under the oversight of lenders, the company underwent a structured resolution plan that involved rescheduling repayments, reducing interest burdens and converting portions of debt into longer-tenure instruments. This provided immediate breathing room and stabilised cash flows.
As steel prices recovered from 2019 onwards and domestic infrastructure demand revived, the company’s realisations improved significantly. The company has delivered a steady multi-year de-leveraging cycle, cutting secured debt from Rs 5,759 crore in March 2020 to Rs 2,721 crore by March 2025. This consistent drop reflected stronger cash generation, disciplined repayment and improved operating performance across this period.
The financial turnaround was also dramatic. In the first half of FY26, net sales rose 29% to Rs 3,430 crore, driven by improved demand across steel, castings and engineering products. EBITDA nearly doubled to Rs 650 crore, translating to an expansion in operating margins from 12.79% to 18.95%. Finance costs fell 19.8% to Rs 232 crore as the company continued to de-leverage and refinance high-cost debt, while depreciation increased marginally to Rs 150 crore.
PAT jumped from a loss of Rs 66 crore to a profit of Rs 198 crore, marking a clean return to profitability. Cash profit, a key indicator of internal accrual strength, surged from Rs 50 crore to Rs 418 crore, underscoring the stability of operations and the strength of the turnaround.
Going forward, the company plans to implement a 1.5 MnTPA pellet plant at Raipur, expand iron ore mining capacity to 7 MnTPA, and integrate new IT systems to improve process visibility. “Product innovation remains a priority, enabling entry into higher-value steel grades and new sectors,” it said.
Analysts see further upside ahead
The shares have delivered multibagger returns to investors in just seven months this year from a low of Rs 35. The stock is currently trading at around Rs 75.
Currently, the company’s debt stands at Rs 2,410 crore. In August 2025, the company refinanced Rs 2,300 crore of high-cost NCDs with Tata Capital at a reduced interest rate of 12.5% per annum and a 72-month repayment, featuring a debt service reserve and early repayment redemption options.
“With obligations of Rs 479 crore and Rs 383 crore in FY26 and FY27, respectively, internal accruals are expected to comfortably cover repayments. The debt refinancing will help the company in reducing financing costs and extending the debt tenor,” Bajaj Broking said.
“Jayaswal Neco Industries has transitioned from a stressed asset to a structurally stronger, integrated steel and mining player. With secure mining leases till 2055, expansion in pelletisation and beneficiation capacities, cost-efficient integrated steel operations and an ongoing debt optimisation exercise, the company is well-positioned to deliver sustainable earnings growth and margin improvement,” the brokerage noted while assigning a target price of Rs 91 for this “alpha trade”, a 21% upside from current levels.
A key concern
Nearly the entire shareholding of the promoters (55% as of September 2025) is pledged. However, 50% of this pledge will be released after 50% of the repayment, enhancing financial flexibility.
“The company’s financial flexibility remains constrained due to high promoter pledge, lack of established banking credit relationships and potential delays in environmental clearance (EC) for mining expansion,” the broker said.
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