Investor Q3

Exponential Growth with Raw Material Security…

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

Ferrous & NonFerrous Ores & Minerals

Dec – 03

15%

Jan – 04

13%

Jan – 05

0%

Apr – 06

-5%

Sep – 06

-5%

Nov – 06

-5/-10%

Apr – 07

Jun – 07

Jan08

-5/-10%

-10/-15%

-10/15%

-10%

-15%

-25%

Reduction in Export Quota for All Ores & Refractory Minerals every year Coke

15%

13%

0

-5%

-5%

-10%

Reduction in Export Quota for Coke every year Semi Finished a) Steel Product (Pig iron, Slabs & Billets)

15%

13%

0%

-10%

-10%

-10%

-10%

-15%

-25%

Introduction of Licensing for Quantitative Restriction b) Non Ferrous Product ( Copper & Aluminum product)

15%

13%

-5%

-10%

-10%

-15%

-15%

-15%

-15%

Finished Steel Product Hr Coil, Wire & Rod, Bar & Rebar

15%

13%

13%

11%

8%

8%

0

-5/-10%

-15%

6

Growing India • GDP growth

9% (2008)

Finished steel Production at 38.05 Mnt, 6.6%

Finished steel consumption at 39.1 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 100% Captive Raw material

Severstal Posco Bao Steel

Arcelor Mittal

Efficient & Low Conversion Cost

Nucor

7.95 7.82

7.77

NLMK

7.64

Tata/Corus 7.57 SDI JSW Steel EZZ CSN

7.29 Source: WSD

Global Size & Efficient Operation

7.50 7.36

7.33 7.29

7.55

Potential for JSW to improve due to: ¾Scaling up Capacities. ¾Increasing Raw Material Security 9

Leading Integrated Steel Producer …

Achieve Global Size of Operation

Building Resilience by targeting 100% Raw Material Security

10

Exponential Growth… Existing

Under Implementation CAGR 30 %

CAGR 25%

35

Under Development

CAGR 23% -11%

31

30

Million tonnes

25

20 17

20 11

15 7.8

10 5

0.8

1.6

2.5

3.8

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 2015

Year 2012 JSW Steel

Year 2020

JSW Steel 16%

20%

80%

JSW Steel

84%

India’s estimated Crude Steel Capacity at 85 mn

India’s estimated Crude Steel Capacity at 125 mn

16%

84%

India’s estimated Crude Steel Capacity at 192 mn

Poised to become Leading Player in the Indian Steel Diaspora… Source: Ministry of steel

12

31mtpa by 2015-20

Jharkhand, 10 Mt Tarapur

80 & 120kms Vasind

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 Bengal

-

-

-

6 Mt

6 Mt

10 Mt

Jharkhand

-

-

-

-

3 Mt

10 Mt

Total

8 Mt

11 Mt

11 Mt

17 Mt

20 Mt

31 Mt

West Bengal, 10 Mt UK 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 ¾

Total Quantity ~ 15,00,000 m3

¾ ¾

Structural ¾Total Structural ~ 2,75,000 ton

Contracts ¾No. of Major Contracts~

400

Avg. concreting per month~ 80,000 m3 ¾Fabrication per month ~ 15,000 ton

¾Number of contractors ~

60

Indian Standard~ 60,000 m3

¾Number of Expatriate ~ 125

¾Structure Erection/ month ~ 13,000 ton

¾Number of Foreign Co. ~

It is Equivalent to building 26 It is equivalent to building 2 Km long National highway Eiffel Towers per month (2 lane) every month.

20

¾Number of Indian Co. ~ 300

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 •Coking Coal •Thermal Coal

75-100% 50-100% 100%

16

Raw Materials Requirement (MTPA)

Year FY

Steel Capacity

Iron Ore

Coking Coal

Soft Coking Coal

Thermal 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

Karnataka

Tamil Nadu

Location

Area

VMPL

Potential Output (MTPA)

Allotment Status

1.5

Right to Mine rest with JV Co. ( MML & JSW Group.)

Remarks

Exp. Time Frame

*

------------------Operational-----------------

Hadimmapade

200 ha

2

Allotted to JSW Steel Ltd.

Statutory & Forest Approvals are under progress

6-12 months

Donimalai Mines

553 ha

3

Recommended to JSWSL, VMPL,SWML

Approvals are under progress

12-24 months

Kanjamalai

630 ha

1

Allotted to TIMCO ( JV Co. Of JSW SL & TIDCO)

Statutory & Forest approvals are under process

12-18 months

Kavuthimalai

325 ha

1

Recommended to TIMCO ( JV Co. Of JSW SL & TIDCO)

Approvals are under process

1388

8

Prospecting License to JSW Steel ltd.

Statutory & Forest approvals are under process

15-24 months

20

JV Co. under Discussion

Mine development work is under progress.

12-36 months

MoU for 25 Years Signed

Ongoing

Jharkhand

Ankua

Over Seas

South America/Chile

12-24 months

Acquired concessions on 1200 hectares

Total

36.5 NMDC (LTA)

2.5-8

JSW Steel Ltd.

Achieve 75% self sufficiency with 37 MTPA & Target to be 100% * Any delay in receipt of approvals as assessed can change the time frame

18

Coal Self Sufficiency( Steel Making) (MTPA) State/Country

Location/ Coal Block

Jharkhand

Rohne

West Bengal

Kulti/ Sitarampur/

Mozambique*

Tete Province

Total Markets

LTA

Coking Coal

3

NonCoking Coal

Allotment

Mineable Resources

Commissioning Schedule

-

Allotted to JVCo. (JSW SL 69%, Bhushan Steel 24%, Jai Balaji 7%)

250

FY11

Allotted to WBMDTC LTA with JSW at Cost + basis.

150

FY’12

Secured by JSW Steel ltd.

188

FY’09

5

2

2.5

10

2.5

10

3.2

588

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 requirement

Proposed Power Plant Capacity

Gas Based

Coal Based

Coal Requirement

Jharkhand

900

900 MW

200 MW

700 MW

2 MT

West Bengal

800

1800 MW

200 MW

1600 MW

4 MT

Vijaynagar & Siscol

890

890 MW

260 MW

630 MW

1.5 MT

Coal Sourcing State

Location/Coa l Block

Thermal Coal

Allotment

Commissioning Schedule

Jharkhand

Rohne

2 MT

Allotted to JVCo. (JSW SL 69%, Bhushan Steel 24%, Jai Balaji 7%)

FY 11

West Bengal

Icchapur/

3 MT

Allotted to WBMDTC LTA with JSW at Cost + basis. Allotted to JSW SL (50%) & Himachal EMTA (50%)

FY 12

1.5MT

Secured by JSW Steel

FY 09

Gourandih Vijaynagar/Salem

Mozambique

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 EBIDTA Margin

15% 29.8%

EBIDTA

Rs. 773 Cr

Net Profit

Rs. 328 Cr

22

Production – Q3 FY08 15% 0.9 0.8

0.841

6% 0.730 0.686 0.648

Mn Tonnes

0.7 0.6 0.5 0.4

-6% 0.3

59%

0.2 0.1

0.201 0.190

37%

0.060

0.022 0.016

0.038

0 Crude Steel

HR Coil

HR Plates

Q3 FY07

GP/GC

PPGI

Q3 FY08

Highest Ever Quarterly Production 23

Sales – Q3 FY08 4% 0.43 0.41

0.45 0.40

Mn Tonnes

0.35 0.30

- 6%

0.25 0.20 0.15

0.18 0.17

215%

0.10 0.05

75%

0.07

52%

0.06

0.02

0.03

0.02

0.02

0.00 Slabs

HR Coil

HR Plates

Q3 FY07

GP/GC

PPGI

Q3 FY08

Blended Sales 0.775 Million Tonnes : Up by 13% 24

Raw material Price Movements Iron Ore

Imported Coke 16000

2500

14527

14000

2032

57%

2000

10000

9241

Rs. / t

Rs. / t

12000

8000 6000 4000

1500

75%

1162

1000 500

2000 0

0

Q3 FY07

Q3 FY08

Impact on Cost : Rs. 1,312 / t CS : Rs. 110 Cr - ve

China FOB USD 171/t to 376/t up by 120%

Q3 FY07

Q3 FY08

Impact on Cost : Rs. 1,488 / t CS : Rs. 125 Cr - ve

CIF China USD 75/t to 184/t up by 145%

Input costs surge impacting margins 25

Operating Parameters Fuel - Corex

Power Consumption 700

616

3.5%

600

1200

594

1030

5% 974

1000

Rs. / t

400 300

800 600 400

200

200

100

0

0 Q3 FY07

Q3 FY07

Q3 FY08

Impact on Cost : Rs. 57 / t CS : Rs. 4.8 Cr Fluxes + ve Consumption

70

37.5%

113.1

100

75

66

60

M3 per / t LS

121.7

109 / t CS 7.5 Cr

LD Gas Recovery M3/t of LS

7.0% 125

Q3 FY08

Impact on Cost : Rs. : Rs. + ve

Fluxes Consumption in Blast Furnace

Kg / t

Rs. / t

500

50

48

40 30 20

50

Q3 FY07

Q3 FY07

Q3 FY08

Q3 FY08

Impact on Cost : Rs. 4 / t CS : Rs. 0.3 Cr + ve

Impact on Cost : Rs. 18 / t CS : Rs. 1.5 Cr + ve

26

Financial Highlights

Ò Debt

Ò The

repayment of Rs. 285 crores

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

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

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

Production

501327

81992

213411

43370

Capacity Utilisation Yield

51.53% 81.08%

53.96% 81.12%

38.80% 99.0%

50.49% 98.2%

Sales

201963

40248

243207

50155

Highest ever pipe production in Dec.’07 29

Operational Performance – USA cont..

a) Turnover b) EBIDTA c) Other income EBIDTA + Other income d) Interest Operating Co. Holding Co. Cash Profit e) Depreciation Profit Before Tax f) Tax Profit After Tax

FY 07 (July-June) (USD Mio) (Rs. In Crs.) 510.070 2,078.54 73.450 299.31 14.40% 1.225 4.99 74.675 304.30 4.640 18.91

70.035 4.564 65.471 19.063 46.408

285.39 18.60 266.79 77.68 189.11

5/11/07 to 31/12/07 (USD Mio) (Rs. In Crs.) 110.628 436.43 16.373 64.59 14.76% 16.373 64.59 9.490 37.44 6.870 27.10 2.620 10.34 6.883 27.15 5.352 21.11 1.531 6.04 0.628 2.48 0.903 3.56

30

Consolidated Results– Q3 FY08 Rs. Crs.

JSW Steel Ltd. (Standalone)

JSW Steel Ltd. (Consolidated)

Net 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

0.74

1.27

Particulars

Adj. Debt :Equity Ratio (times)

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

REFRECTORY ERECTION IN BATTERY#D

BATTERY#C Oven Area

SILOS 39

Blast Furnace # 3

BF#3 : CYCLONE

BF#3 : STOCK HOUSE

BF#3 :SHELL

BF#3 : DE-MISTER

40

Basic Oxygen Furnace #2

Chimney

Piping in D Row

Surge tank

Erection In LTSS-1

41

CCP #2 BILLET CASTERS FOR LONG PRODUCTS

BILLET CASTER DISCHARGE ROLLER TABLE

BILLET CASTER MACHINE & ROT

SLAB CASTERS FOR FLAT PRODUCTS

SLAB CASTER VIEW

42

10 MTPA

Site Leveling 43

New HSM

SLAB YARD

UTILITY AREA

SITE VIEW

CIVIL WORKS

44

Beneficiation Plant

TERRACED AREA

CONTRUCTION SWITCH HOUSE

BARREL RECLAIMER CONVEYOR CIVIL WORK

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

Cost (Rs in crores) 5000 10000 15000

To Commission the Plant by June 2011

47

Cold Roll Mill ( Commissioned in Q2 2008)

Continuous pickling line

Batch Annealing

Skin pass mill

Roll Shop

Packed Material 48

Way Forward… Sustainable Growth. ..creating VALUE 31 million tons by 2020

Grow Market Share

Improve Vertical Integration

Product Diversification

Strengthen Backward Linkages Expand global presence with value addition closer to markets

Consolidate position in domestic steel industry with focus on enhancing capacities at competitive cost

Focus on Diversified Markets for Premium Steel Products and enhance value

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