Jayaswal Neco Industries Ltd (JNIL) is an integrated steel manufacturer engaged in the production of pig iron, sponge iron, billets, rolled products and ferroalloys, supported by indigenous mining and energy resources. Its operations are concentrated in Chhattisgarh and Maharashtra, where the company operates blast furnaces, steel smelters, rolling mills, coke ovens and power units. JNIL also owns and operates its own iron ore mines and coal blocks, which supply a significant portion of its raw material needs. This integrated structure gives the company a cost advantage over non-integrated steelmakers and helps stabilize margins during commodity cycles.The bankruptcy that was avoided
The company’s financial problems can be traced back to the steel sector’s downturn in the early and mid-2010s, when the sector faced a serious combination of overcapacity, high debt and collapsing prices. The company had carried out major expansions of mining and steel production capacity in recent years, largely financed with debt capital.
As steel prices fell sharply and demand weakened, revenues failed to keep pace with rising interest and operating costs. High debt levels, major work in progress and cost overruns began to put pressure on liquidity. The company also faced delays in environmental permits and regulatory approvals for mining operations, impacting the supply of raw materials and increasing cash flow pressures. Banks classified their loans as non-performing as their repayment capacity deteriorated. Between 2017 and 2018, Jayaswal Neco had become one of several beleaguered steel companies pushed towards insolvency under the Insolvency and Bankruptcy Code (IBC). The company waged 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. Though SBI filed a petition, Jayaswal Neco was never admitted for bankruptcy. The Supreme Court later allowed the withdrawal of the bankruptcy petition.
A rebound
Jayaswal Neco avoided liquidation through a combination of debt restructuring, improved industry conditions and operational reforms. Under the supervision of lenders, the company underwent a structured resolution plan that included rescheduling repayments, reducing interest expense and converting portions of debt into longer-term instruments. This provided immediate breathing space and stabilized cash flows.
As steel prices recovered from 2019 and domestic demand for infrastructure revived, the company’s results improved significantly. The company has achieved a steady multi-year deleveraging cycle, reducing secured debt from Rs 5,759 crore in March 2020 to Rs 2,721 crore in March 2025. This consistent decline reflected stronger cash flow generation, disciplined repayment and improved operating performance during 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 for steel, castings and engineering products. EBITDA almost doubled to Rs 650 crore, which translated into an expansion in operating margins from 12.79% to 18.95%. Financing costs fell 19.8% to Rs 232 crore as the company continued to deleverage and refinance expensive debt, while depreciation rose 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 the strength of the internal build, rose to Rs 418 crore from Rs 50 crore, underscoring the stability of the business and the strength of the turnaround.
In the future, the company plans to implement a 1.5 MnTPA pellet plant in Raipur, expand iron ore mining capacity to 7 MnTPA and integrate new IT systems to improve process visibility. “Product innovation remains a priority, enabling access to higher-quality steels and new sectors,” the report said.
Analysts see even more upside potential
The stock has given investors multibagger returns 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 worth of expensive NCDs with Tata Capital at a reduced interest rate of 12.5% per annum and repayment over 72 months, with a debt service reserve and early repayment options.
“With liabilities of Rs 479 crore and Rs 383 crore in FY26 and FY27 respectively, internal provisions are expected to cover repayments comfortably. The debt refinancing will help the company reduce financing costs and extend debt maturity,” Bajaj Broking said.
“Jayaswal Neco Industries has evolved from a stressed asset to a structurally stronger, integrated steel and mining player. With secure mining leases till 2055, expansion of pelletizing and processing capabilities, cost-efficient integrated steel operations and continued debt optimization, the company is well positioned to deliver sustainable earnings growth and margin improvement,” the broker noted while assigning a target price of Rs 91 for this “alpha trade”, up 21% from the current levels.
An important concern
Almost the entire shareholding of the initiators (55% from September 2025) has been pledged. However, 50% of this commitment will be released after 50% of the repayment, increasing financial flexibility.
“The company’s financial flexibility remains limited due to the promoter’s high commitments, lack of established bank credit relationships and possible delays in environmental clearance (EC) for mining expansion,” the broker said.
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