How Abhyuday Jindal, MD of Jindal Stainless, pushed the company to overcome its supply chain worries

Engineering proficiency is essential in the steel industry. It’s no wonder, then, that the Jindal family places a premium on an engineering degree. But 34-year-old Abhyuday Jindal, the MD of Jindal Stainless Limited (JSL), deviated from that script, opting out of engineering when he was 17.

He did initially plan to pursue mechanical engineering at Boston University, but just before joining college, Jindal took time to understand the intricacies of stainless steel at the company’s plant, participating in the induction of new hires, who were mostly engineers, for a year as an associate manager in 2010. That stint led Jindal to question the value he would bring to the company, which boasted of stellar engineering talent. After discussions with his father and advisors, Jindal decided to study economics and business instead. “Being an engineer adds tremendous value to the business, but there is so much more—other than technical aspects—that, if I were an engineer, I could never learn,” he says.

That quest for a deeper understanding of business led to a one-and-a-half-year stint as a consultant at the Boston Consulting Group (BCG) after his degree, before he joined JSL as its Vice Chairman in November 2015. It was at BCG that tremendous learning occurred, and Jindal is still trying to embed some of those insights into his company. “I was part of different industries and a different discipline—in the cement industry, the focus was on sales and marketing; in wind energy, on project execution; and then in auto components, on vendor management.” But as he was preparing for an MBA course, he was called back home. JSL had hit its lowest market capitalisation level, so he joined the company. “It was a real tough time when I entered... it was baptism by fire.”

To identify where the problem was, Jindal started by interacting with people on the ground—the suppliers, customers, and other stakeholders. He realised the company’s biggest concern was delivery. The initial loose-ended commitment of six to eight weeks posed challenges, with orders being fulfilled in as little as four weeks or taking as long as 16 weeks. He zeroed in on the pain point: the supply chain. Jindal dedicated two years to streamlining it. Transitioning from a ‘Made to Order’ model—where the firm only makes the product once the order comes in—he introduced a dual approach. The firm would continue to follow the ‘Made to Order’ approach for month-on-month repeat orders, but for specific orders, it would move to an ‘Anticipation of Stock’ approach, where the firm would have some buffer inventory.

That done, Jindal analysed years of company data, applying the insights from BCG, and realised that another issue was the heavy dependence on specific industries. That triggered the next change, which was to not have more than 15-20% dependence on any industry or geography. This strategic shift shielded JSL from market fluctuations. For instance, at the peak of the lockdown in 2020 because of Covid-19, when the auto industry faced a downturn, sales fell 60%. The company redirected volumes to other segments, preventing a dip. Similarly, facing a 15% export duty in 2022, impacting 25–30% of exports to the US and Europe, Jindal says the firm prioritised long-term contracts, absorbing losses on unscheduled exports, and rerouting the volume to the domestic market.

It had to shore up the raw material supply, considering the high volatility, particularly in nickel. The rising price of nickel posed a significant challenge for JSL. To address this, in March 2023, JSL entered a partnership with New Yaking Pte Ltd, investing $157 million over two years for a 49% equity stake in a nickel pig iron smelter facility in Indonesia.

Around this time, Jindal turned his attention to the opportunities opened up by technological change. JSL became the first firm in India’s metals sector to implement automated logistics systems. The entire truck ordering process is now fully automated, and efforts are underway to automate supply chain and procurement processes. “There are many firsts that we are working on that will not only become a showcase for Indian companies, but even global companies, because we are now at a size where we are no longer [just] a domestic player.”

But perhaps the biggest challenge he had to tackle was that of counterfeit products. In the stainless steel sector, where there is a substantial unorganised segment, smaller players falsely label their products, tarnishing the reputation of both Jindal Stainless and the metal itself. Direct product branding was impractical for JSL, a B2B company. To distinguish its stainless steel in the decorative pipes and tubes segment, the company introduced co-branding with “Jindal Saathi”. Under this initiative, exclusive partners, bound by MoUs, added their logos alongside the JSL seal, providing a quality guarantee. “Relate this to Intel Inside,” he says. Intel was not making the software or the hardware. But the marketing was that you buy Compaq or IBM machines, and they have Intel inside. “So that is our concept: that you can buy from any pipe and tube [vendor], and if [the] JSL co-branding is there, we can guarantee it is the right product, the right material, and it will have the same warranty or features.”

Despite having achieved all this, Jindal remains restless. Though the company has a 50% share of the domestic stainless steel market, JSL is looking to expand its footprint. “Until now, JSL was in flat products, but now it is getting into long products with the recent acquisition of Rathi Steel. It has invested another Rs 150 crore in capex, and production has started. The numbers will start flowing from Rathi Steel as well. Long products are used in infrastructure, and the usage is also evolving,” says Tushar Chaudhari, Research Analyst at brokerage Prabhudas Lilladher.

JSL has also diversified into other areas, like defence and aerospace, and is now looking to expand even in terms of geography in India.

Jindal, winner in the Mid-sized Companies category of the BT-PwC India’s Best CEOs ranking, says his success is rooted in his guiding philosophy: “keeping your ear to the ground” and “keeping things simple”.

Now that’s a formula for success.

@nidhisingal