JFE Holdings: F3/27 1Q Results: India Business Drives Earnings

Research evidence excerpt

M

Update

August 5, 2026 09:59 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+

JFE Holdings (5411) | Japan

Yu Shirakawa

Equity Analyst

F3/27 1Q Results: India Business

Drives Earnings

AlphaSignals Earnings Reaction

JFE Holdings (5411.T, 5411 JT)

Unchanged

In-line

Modest revision higher

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

We believe F3/27 1Q results exceeded consensus: Announcement at 2:00pm JST

on Aug 5, briefing held on the same day. 1Q business profit came in at ¥32.3bn (+

Steel | Japan

Stock Rating

Industry View

Price target

Shr price, close (Aug 5, 2026)

Mkt cap, curr, basic (bn)

Avg daily trading value (bn)

Equal-weight

Cautious

¥1,800

¥1,839

¥1,169.5

¥8.5

¥16.1bn YoY), broadly in line with our forecast of ¥33.2bn. While consensus for BP is

unavailable, we believe the result exceeded market expectations. Excluding

inventory-related impacts, BP was ¥14.3bn (-¥30.9bn YoY). On a YoY basis, the main

drag was a ¥45.0bn deterioration in spreads, reflecting weaker domestic and

overseas steel market conditions, higher raw material costs, and increased costs

stemming from Middle East-related disruptions. However, improvements in

inventory valuation and other factors more than offset the spread deterioration,

resulting in a YoY increase in reported BP.

The fact that JFE reviewed its F3/27 assumptions and still maintained its

guidance should provide reassurance to investors: Full-year guidance (excluding

inventory valuation effects) calls for business profit of ¥185.0bn, up ¥18.7bn YoY.

Our forecast stands at ¥170.0bn. While the initial plan did not factor in the impact

of Middle East-related disruptions, the updated guidance now assumes WTI crude

oil at $80/bbl from July and incorporates a ¥60.0bn negative impact, broadly in line

with Nippon Steel's assumption. Compared to the previous plan, a ¥16.0bn profit

headwind from spread deterioration is expected to be offset by ¥2.0bn of cost

improvements, ¥3.0bn from volume/mix, and ¥11.0bn from other factors, including

¥8.0bn from the India business. The company also announced the signing of a land

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