Exponential Growth

with Raw Material Security…

Exponential Growth
Presentation to Analysts & Investors
with Raw Material Security…
Presentation to Analysts
Q3& FY08.
Investors
Q3 FY08 1
 Agenda

• Steel Scenario

• JSW Today & Beyond…

• Performance Highlights

• Quarterly Developments

• Way forward…

2
Steel
Scenario

3
 Global Economy - Outlook 2008

Slowdown
Slowdown in
in mature
mature markets
markets led
led by
by turmoil
turmoil in
in the
the financial
financial Markets
Markets

•• Moderation
Moderation in
in growth
growth in
in emerging
emerging markets
markets faced
faced with
with challenge
challenge of
of trade
trade
off
off between
between growth
growth and
and inflation
inflation

Other Challenges:

•• Soaring
Soaring Oil
Oil Prices
Prices // Freight
Freight Cost
Cost

•• Shortage
Shortage of
of Mineral
Mineral resources
resources

•• Credit
Credit and
and Liquidity
Liquidity crunch
crunch

Resilient
Resilient emerging
emerging economies
economies cushion
cushion the
the US
US Slowdown-Global
Slowdown-Global GDP
GDP Growth
Growth
3.7%
4
 Global Steel Scenario..

•• Crude
Crude Steel
Steel production
production in
in first
first 11
11 months
months was
was higher
higher by
by 5.7%
5.7% y-o-y
y-o-y

•• Strong
Strong Demand
Demand emanating
emanating from
from Emerging
Emerging economies
economies (( 25%
25% in
in Russia
Russia &
& above
above
10%
10% in
in India,
India, China
China and
and Brazil)
Brazil)

•• Surging
Surging Input
Input Costs
Costs

•• Fall
Fall in
in Exports
Exports from
from China
China

Steel prices set to record ‘New High’

Source:WSD & SBB 5

 Chinese crackdown on Exports
Price Realization = Export price - VAT + Rebate / - Export Tax

Items Dec – 03 Jan – 04 Jan – 05 Apr – 06 Sep – 06 Nov – 06 Apr – 07 Jun – 07 Jan08

Ferrous & Non- 15% 13% 0% -5% -5% -5/-10% -5/-10% -10/-15% -10/-
Ferrous Ores & 15%
Minerals
Reduction in Export Quota for All Ores & Refractory Minerals every year

Coke 15% 13% 0 -5% -5% -10% -10% -15% -25%

Reduction in Export Quota for Coke every year

Semi Finished 15% 13% 0% -10% -10% -10% -10% -15% -25%
a) Steel Product (Pig
iron, Slabs & Billets)
Introduction of Licensing for
Quantitative Restriction
b) Non Ferrous Product ( 15% 13% -5% -10% -10% -15% -15% -15% -15%
Copper & Aluminum
product)

Finished Steel Product 15% 13% 13% 11% 8% 8% 0 -5/-10% -15%

Hr Coil, Wire & Rod,
Bar & Rebar

6
 Growing India

• GDP growth 9% (2008)

Finished steel Finished steel

Production at consumption at 39.1
38.05 Mnt, 6.6% Mnt 11.3%

‘Net Importer’ of Steel.

Expected Import of 5 Mnt
of Steel in current
Financial Year
66.69% yoy

• Steel Production & Consumption In April – Dec 2007:

Robust
Robust Investment
Investment pipeline
pipeline drives
drives Steel
Steel Demand
Demand -2008
-2008

7
8
JSW Ranked 9th in top 30 “World-Class” Steelmakers

Low Cost Operation with Severstal

100% Captive Raw material
Posco

Bao Steel
7.95
Arcelor Mittal
7.82
Efficient & Low Conversion Cost
Nucor 7.77
NLMK 7.64
Tata/Corus
7.57
SDI Global Size & Efficient Operation
7.55
JSW Steel 7.50
EZZ 7.36
CSN
7.33 Potential for JSW to improve due to:
7.29 ¾Scaling up Capacities.
¾Increasing Raw Material Security
7.29
Source: WSD
9
Leading Integrated Steel Producer …

Achieve Global
Size of Operation

Building Resilience by
targeting 100% Raw
Material Security

10
 Exponential Growth…
Existing Under Implementation Under Development
CAGR 25% CAGR 30 % CAGR 23% -11%
35
31
30

25 20
17
20
Million tonnes

15 11
7.8
10
2.5 3.8
5 0.8 1.6

0
1999 2001 2004 2006 2008 2010 2012 2013 2015-20

Measure of “Performance Vs Promise”- Projects Running Ahead of Schedule

11
 Leadership Position in Domestic Steel Industry…

Year 2012 Year 2015 Year 2020

JSW Steel JSW Steel JSW Steel
20% 16% 16%

80% 84% 84%

India’s estimated Crude India’s estimated Crude India’s estimated Crude

Steel Capacity at 85 mn Steel Capacity at 125 mn Steel Capacity at 192 mn

Poised to become Leading Player in the Indian Steel Diaspora…

Source: Ministry of steel 12

 31mtpa by 2015-20
FY-2009 FY-2010 FY-2011 FY-2012 FY-2013 FY-2020
Karnataka 7 Mt 10 Mt 10 Mt 10 Mt 10 Mt 10 Mt
Tamilnadu 1 Mt 1 Mt 1 Mt 1 Mt 1 Mt 1 Mt
West - - - 6 Mt 6 Mt 10 Mt
Bengal
Jharkhand - - - - 3 Mt 10 Mt
Total 8 Mt 11 Mt 11 Mt 17 Mt 20 Mt 31 Mt

Jharkhand, 10 Mt West Bengal, 10 Mt

Tarapur 80 & 120kms
UK
Vasind
0.2 Million Ton Service Center
catering to Auto Sector
Karnataka, 10 Mt

USA
1.2 Million Ton Plate Mill & 0.5
Million Ton Pipe Plant
Tamilnadu, 1 Mt

Catapults “JSW Steel” to Consolidate its Position.

13
 Growth Dynamics…
Stupendous growth rates are achieved on the back of ……
Strong project execution capabilities
Experienced Project team.
No EPC Contracts, Managing 525 nos. of packages.
Executing two projects of 3 MTPA each simultaneously at single location.

Civil Structural Contracts

¾ Total Quantity ~ 15,00,000 m3 ¾Total Structural ~ 2,75,000 ton ¾No. of Major Contracts~ 400
¾ Avg. concreting per month~ 80,000 m3 ¾Fabrication per month ~ 15,000 ton ¾Number of contractors ~ 60
¾ Indian Standard~ 60,000 m3 ¾Structure Erection/ month ~ 13,000 ton ¾Number of Expatriate ~ 125

¾Number of Foreign Co. ~ 20

It is Equivalent to building 26 It is equivalent to building 2 ¾Number of Indian Co. ~ 300

Km long National highway Eiffel Towers per month
(2 lane) every month.

32,000 People working on expansions at Vijaynagar Works

14
 Building Resilience
by
targeting 100% Raw Material Security

15
 Building Resilience by targeting 100% Raw Material Security

Today

•JSW Steel Ltd. Scores over Global Peers being ‘Efficient and Low Conversion
Cost Steel Producer’
•Strategic Initiatives towards achieving Raw Material Security.

Tomorrow

Target: Self Sufficiency in Raw Material

Raw Material % self Sufficiency

•Iron Ore 75-100%
•Coking Coal 50-100%
•Thermal Coal 100%

16
 Raw Materials Requirement
(MTPA)

Year Steel Iron Coking Soft Thermal

FY Capacity Ore Coal Coking Coal
Coal
2008 5 8.0 2.3 2.0 0.5

2010 11 18.0 7.0 3.0 1.5

2012 17 27.0 11.0 3.5 3.5

2013 20 32.0 13.0 4.0 4.5

2020 31 50 20.0 6.0 7.5

Raw Material Per Ton

Blast Furnace Corex
Coking Coal (Kg) 650 150
Soft Coking (Kg) 150 850
Iron Ore (Kg) 1600 1600 17
 Iron Ore Self Sufficiency
State Location Area Potential Allotment Status Remarks Exp. Time
Output Frame *
(MTPA)
Karnataka VMPL 1.5 Right to Mine rest with JV Co. ------------------Operational-----------------
( MML & JSW Group.)
Hadimmapade 200 ha 2 Allotted to JSW Steel Ltd. Statutory & Forest Approvals 6-12 months
are under progress

Donimalai 553 ha 3 Recommended to JSWSL, Approvals are under 12-24 months

Mines VMPL,SWML progress

Tamil Nadu Kanjamalai 630 ha 1 Allotted to TIMCO Statutory & Forest approvals 12-18 months
( JV Co. Of JSW SL & TIDCO) are under process

Kavuthimalai 325 ha 1 Recommended to TIMCO 12-24 months

Approvals are under process
( JV Co. Of JSW SL & TIDCO)

Jharkhand Ankua 1388 8 Prospecting License to JSW Statutory & Forest approvals 15-24 months
Steel ltd. are under process

Over Seas South 20 JV Co. under Discussion Mine development work is 12-36 months
America/Chile under progress.
Acquired concessions on 1200
hectares
Total 36.5
NMDC (LTA) 2.5-8 JSW Steel Ltd. MoU for 25 Years Signed Ongoing

Achieve 75% self sufficiency with 37 MTPA & Target to be 100% 18

* Any delay in receipt of approvals as assessed can change the time frame
 Coal Self Sufficiency( Steel Making)
(MTPA)

Location/ Non- Mineable

Coking Commissioning
State/Country Coking Allotment
Coal Block Coal Resources Schedule
Coal
Allotted to JVCo.
(JSW SL 69%,
Jharkhand Rohne 3 - 250 FY11
Bhushan Steel 24%,
Jai Balaji 7%)

Kulti/ Allotted to WBMDTC

West Bengal Sitarampur/ 5 LTA with JSW at Cost 150 FY’12
+ basis.

Tete Secured by JSW

Mozambique* 2 2.5 188 FY’09
Province Steel ltd.

Total 10 2.5 588

Markets LTA 10 3.2

50% self Sufficient in Coking Coal and Targeting 100% in near

future by scouting for additional Mines.

* Two more Coal concessions secured and its technical due diligence under progress.
19
 Coal Self Sufficiency (Power Generation)
State Power Proposed Gas Coal Coal
requirement Power Plant Based Based Requirement
Capacity
Jharkhand 900 900 MW 200 MW 700 MW 2 MT
West Bengal 800 1800 MW 200 MW 1600 MW 4 MT

Vijaynagar & 890 890 MW 260 MW 630 MW 1.5 MT

Siscol

Coal Sourcing
State Location/Coa Thermal Allotment Commissioning
l Block Coal Schedule

Jharkhand Rohne 2 MT Allotted to JVCo. (JSW SL 69%, Bhushan FY 11

Steel 24%, Jai Balaji 7%)

West Bengal Icchapur/ 3 MT Allotted to WBMDTC FY 12

LTA with JSW at Cost + basis.
Allotted to JSW SL (50%) & Himachal EMTA
Gourandih (50%)
Vijaynagar/Salem Mozambique 1.5MT Secured by JSW Steel FY 09

100% Self Sufficient in Thermal Coal 20

 JSW Steel Ltd.

Performance
Bn
Highlights…

21
Key Highlights of the Quarter …

Q3’08 V/S Q3’07

Particulars Growth %
Volume : Crude Steel Production 15%
: Saleable Steel 13%
Net Sales 12%
Blended : Sales Realisation 4%
: Cost of Production 15%

EBIDTA Margin 29.8%

EBIDTA Rs. 773 Cr
Net Profit Rs. 328 Cr

22
 Production – Q3 FY08
15%
0.9 0.841
6%
0.8
0.730
0.686
0.7 0.648

0.6
Mn Tonnes

0.5

0.4
-6%
0.3
0.201
0.190
0.2 59% 37%

0.1 0.060 0.022

0.038 0.016
0
Crude Steel HR Coil HR Plates GP/GC PPGI

Q3 FY07 Q3 FY08

Highest Ever Quarterly Production

23
 Sales – Q3 FY08
4%
0.45 0.43
0.41
0.40

0.35

0.30
Mn Tonnes

0.25 - 6%

0.20 0.18 0.17

0.15 215%
75%
0.10 0.07 52%
0.06
0.05 0.03 0.02
0.02 0.02
0.00
Slabs HR Coil HR Plates GP/GC PPGI

Q3 FY07 Q3 FY08

Blended Sales 0.775 Million Tonnes : Up by 13%

24
 Raw material Price Movements

Imported Coke Iron Ore

16000 14527 2500

14000 2032
57%
2000
12000 75%
10000 9241

Rs. / t
1500
Rs. / t

1162
8000
6000 1000

4000
500
2000
0 0
Q3 FY07 Q3 FY08 Q3 FY07 Q3 FY08

Impact on Cost : Rs. 1,312 / t CS Impact on Cost : Rs. 1,488 / t CS

- ve : Rs. 110 Cr - ve : Rs. 125 Cr

China FOB USD 171/t to 376/t up by 120% CIF China USD 75/t to 184/t up by 145%

Input costs surge impacting margins

25
 Operating Parameters
Power Consumption Fuel - Corex
700
616 3.5% 1200
594 5%
600
1030
974
1000
500
800
Rs. / t

Rs. / t
400
600
300
400
200
200
100
0
0
Q3 FY07 Q3 FY08
Q3 FY07 Q3 FY08

Impact on Cost : Rs. 57 / t CS Impact on Cost : Rs. 109 / t CS

+ ve Consumption
Fluxes : Rs. 4.8 Cr + ve : Rs. 7.5 Cr

Fluxes Consumption in Blast Furnace LD Gas Recovery M3/t of LS

7.0% 70 66
125 121.7 37.5%
113.1 60

M3 per / t LS
50 48
100
Kg / t

40

75
30

20
50 Q3 FY07 Q3 FY08
Q3 FY07 Q3 FY08

Impact on Cost : Rs. 4 / t CS Impact on Cost : Rs. 18 / t CS

+ ve : Rs. 0.3 Cr + ve : Rs. 1.5 Cr
26
 Financial Highlights

Ò Debt repayment of Rs. 285 crores

Ò The Weighted Avg.rate of Interest at 7.73 %

Ò Adjusted Debt Equity ratio at 0.74

Ò Adjusted Long Term Debt to EBITDA at 1.61

27
 Financials
(Rs. In Crores)
Particulars Q3 2007 Q3 2008 Growth %

Gross sales 2502.32 2828.78 13%

Net Sales 2291.00 2563.08 12%

EBITDA 803.28 773.39 (4%)

Interest 110.67 95.25 (14%)

Depreciation & Amortisation 156.45 216.19 38%

Profit Before tax 536.16 461.95 ( 14%)

PAT 362.15 328.18 (9%)

28
 Operational Performance - USA

(Net tons)
Plate Mill Pipe Mill
FY 07 5/11/07 to FY 07 5/11/07 to
(July-June) 31/12/07 (July-June) 31/12/07

Production 501327 81992 213411 43370

Capacity Utilisation 51.53% 53.96% 38.80% 50.49%

Yield 81.08% 81.12% 99.0% 98.2%

Sales 201963 40248 243207 50155

Highest ever pipe production in Dec.’07

29
 Operational Performance – USA cont..

FY 07 5/11/07 to
(July-June) 31/12/07
(USD Mio) (Rs. In Crs.) (USD Mio) (Rs. In Crs.)
a) Turnover 510.070 2,078.54 110.628 436.43
b) EBIDTA 73.450 299.31 16.373 64.59
14.40% 14.76%
c) Other income 1.225 4.99 -
EBIDTA + Other income 74.675 304.30 16.373 64.59
d) Interest 4.640 18.91 9.490 37.44
Operating Co. 6.870 27.10
Holding Co. 2.620 10.34
Cash Profit 70.035 285.39 6.883 27.15
e) Depreciation 4.564 18.60 5.352 21.11
Profit Before Tax 65.471 266.79 1.531 6.04
f) Tax 19.063 77.68 0.628 2.48
Profit After Tax 46.408 189.11 0.903 3.56

30
 Consolidated Results– Q3 FY08
Rs. Crs.

JSW Steel Ltd. JSW Steel Ltd. Net

Particulars (Standalone) (Consolidated) Increase/Decrease

Net Sales 2563.08 2841.90 278.82

Cost 1824.80 2084.38 259.58
EBITDA 773.39 793.70 20.31
Interest 95.25 141.63 46.38
Depreciation & Amortisation 216.19 237.92 21.73
Profit Before tax 461.95 414.15 (47.80)

PAT 328.18 270.06 (58.12)

Net Worth 6742.42 7041.12 278.70

Adjusted Debt 4984.64 8954.96 3970.32

Adj. Debt :Equity Ratio (times) 0.74 1.27

Lower Profit due to Unrealised contribution on

inventory Rs. 42.48 crs

31
 Financials – Key Ratios

Key Ratios UOM Q3 2008 Q3 2007 FY 2007

ROCE % 16.94 26.97 23.77

ROE % 20.14 32.88 28.32

Book Value per share Rs. 395 322 312

Market price per share Rs. 1318 387 493

EPS (Diluted) Rs. 18.61 22.37 78.88

P/E Times 13.59 5.33 6.26

EV/EBITDA times 8.88 3.89 4.24

31st Dec.’07
31st Dec.’06

32
 Quarterly updates...

1. Key Developments
2. Project Status
3. West Bengal Update

33
 Key Developments

•RH Degasser unit commissioned during Nov 2007 to produce better Quality of
special grade steel

•1 MTPA CRM Complex commissioned and started the marketing of CRCA

•One Galvanising line after modification into Galvalume re-commissioned

•8 concessions on an area of 1200 hectares acquired for US$ 52 million in CHILE

for Iron Ore Exploitation and Exploration

•Work on 30 MW Power Plant at Down Stream Facility commenced

•Following the approval of shareholders at the Court convened meeting on 28th

December 2007 ,the final hearing at Hon’ble High Court of Mumbai for considering
the Scheme of Amalgamation of SISCOL with the company is scheduled on 15th
February 2008

34
 Key Developments(Contd)

•Set up additional 300 MW captive Power Plant in lieu of acquisition from JSWEVL

• US acquisition completed on 5th November 2007

35
Project status

36
 Project Status
6.8 MTPA :
Targeted Date of Completion: 31st March 2009 (Running ahead of Schedule)

10 MTPA :
Targeted Date of Completion: 2010 (Running ahead of Schedule)

New HSM 2 MTPA (Phase 1) – 5 MTPA (Phase 2)

Civil works – 33% completed
Structural fabrication and Erection works completed to the extent of 30 % & 15 % respectively

Expected date of completion: 1st October 2009 (Phase 1) & October 2010 (Phase 2)

HSM Modernisation (0.7 MTPA):

Technical discussions completed & Main Package Finalised
Major Orders placed on VAI Siemens & others

Beneficiation Plant (Phase 1 - 10 MTPA):

Orders finalised for major equipment

Site grading 40% completed

Expected date of completion:( FY 2008)
37
 Sinter Plant

ESP OUTLET DUCT-SINTER PLANT SINTER MACHINE – ALT VIEW

SINTER MACHINE – ALT VIEW SINTER PLANT-ESP WITH CHIMNEY 38

 Coke Oven # 3

BATTERY#B Oven Area BATTERY#C Oven Area

REFRECTORY ERECTION IN BATTERY#D SILOS

39
 Blast Furnace # 3

BF#3 : CYCLONE BF#3 :SHELL

BF#3 : STOCK HOUSE BF#3 : DE-MISTER

40
 Basic Oxygen Furnace #2

Chimney Surge tank

Piping in D Row Erection In LTSS-1 41

 CCP #2
BILLET CASTERS FOR LONG PRODUCTS SLAB CASTERS FOR FLAT PRODUCTS

BILLET CASTER DISCHARGE ROLLER TABLE SLAB CASTER VIEW

BILLET CASTER MACHINE & ROT 42

10 MTPA

Site Leveling
43
 New HSM

SLAB YARD SITE VIEW

UTILITY AREA CIVIL WORKS 44

 Beneficiation Plant

TERRACED AREA BARREL RECLAIMER CONVEYOR CIVIL WORK

CONTRUCTION SWITCH HOUSE STORAGE YARD

45
 West Bengal Project Update

• Development Agreement was executed on 11th January 2007 to set up

10 MTPA integrated Steel Plant in phases with Government of West Bengal /WBIDC
/WBMSTC

Current status:
• The Joint Venture company - JSW Bengal Steel Ltd. has been incorporated
• Shareholder’s Agreement has been signed and executed on 22nd Jan 2008
• Acquisition of Land is almost complete
• Coal Agreements on long term basis with WBMDTC expected to be executed
shortly on cost plus basis
• While Iron ore tie up from South American mines is under way by JSW Steel as a
hedge, efforts are on to tie up locally from other sources

46
 West Bengal Project Update (Contd)…
Project Details:
Capacity :6 MTPA

Product :Slabs

Status (Proposed) :SEZ Unit

Targeted Market :1 MTPA to US Plate & Pipe Mill

Balance to be sold in International Markets
Cost of the Project :Rs.15000 crores

Implementation Period :36 months from 1st July 2008

Means of Finance:

Particulars Cost (Rs in crores)

Equity( from JSW steel/WBIDC& WBMDTC/ 5000
Public Issue)
Debt 10000
Total 15000

To Commission the Plant by June 2011

47
Cold Roll Mill ( Commissioned in Q2 2008)

Continuous pickling line Skin pass mill

Batch Annealing Roll Shop Packed Material

48
 Way Forward…
Sustainable Growth. ..creating VALUE

31
million tons by
2020

Improve Vertical Product

Grow
Integration Diversification
Market Share

Strengthen Backward
Linkages
Expand global Focus on Diversified
presence with value Markets for Premium Steel
addition closer to Products and enhance
markets Consolidate position in domestic steel value
industry with focus on enhancing
capacities at
competitive cost
49
Q & A Session…

50
Forward Looking and Cautionary Statement

Certain statements in this report concerning our future growth prospects are forward looking
statements, which involve a number of risks, and uncertainties that could cause actual results to
differ materially from those in such forward looking statements. The risk and uncertainties relating
to these statements include, but are not limited to risks and uncertainties regarding fluctuations in
earnings, our ability to manager growth, intense competition within Steel industry including those
factors which may affect our cost advantage, wage increases in India, our ability to attract and
retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts,
client concentration, restrictions on immigration, our ability to manage our internal operations,
reduced demand for steel, our ability to successfully complete and integrate potential acquisitions,
liability for damages on our service contracts, the success of the companies in which the Company
has made strategic investments, withdrawal of fiscal governmental incentives, political instability,
legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our
intellectual property and general economic conditions affecting our industry. The company does not
undertake to update any forward looking statements that may be made from time to time by or on
behalf of the company.

51