Prabhudas Lilladher's research report on Jindal Steel and Power
Jindal Steel & Power (JSP) delivered strong cons operating performance in Q1FY26 despite lower volumes. Volumes declined 9% YoY affected by early monsoon. Avg. NSR rose 4.5% QoQ, driven by higher long & flats product prices and increase in value added products. Lower coking coal and PCI benefited EBITDA/t improving to Rs15,680 (ex-fx gains). Commissioning of BF-2 at Angul is in the final stages and hot metal production is expected to commence this month (delayed again) and BOF-2 is also nearing completion. Mgmt. reiterated its earlier FY26 sales volume guidance of 8.5–9mt. Monsoon-led demand weakness has pressured prices in recent weeks, which would weigh on near term earnings, though ramp-up of Angul blast furnace would partially offset the impact through higher volumes in 2H. Proportion of flats is also improving and is expected to touch 70% on full ramp up of Angul capex by end FY27E.
Outlook
We have tweaked FY26/27E EBITDA estimates by 5%/4% and expect EBITDA CAGR of 37% over FY25-27E. At CMP, the stock is trading at 9.7x/6x EV of FY26E/27E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs1,060 (earlier Rs1,008) valuing at 6.5x EV of Mar’27E EBITDA.
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