Buy Jindal Steel; target of Rs 1100: Anand Rathi

Anand Rathi is bullish on Jindal Steel has recommended buy rating on the stock with a target price of Rs 1100 in its research report dated August 16, 2025.

Broker Research

August 21, 2025 / 15:29 IST

Buy

26 Aug, 2025 12:21

Volume

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Anand Rathi's research report on Jindal Steel

Jindal Steel is increasing crude steel capacity from 9.6m tonnes to 15.6m and finished steel capacity from 7.25m to 13.75m by FY27-28, making it the fourth largest steel manufacturer in India. BF-2 gas stove heating is complete, and the first hot metal tapping is expected in Q2 FY26. BoF2 furnace is in pre-commissioning testing and expected to come online along with BF-2. FY26 guidance is unchanged (9m-10m tonnes produced, 8.5m-9m sold) as Angul picks up momentum. Predominantly a long-steel manufacturer the company is moving to being a flat-steel manufacturer. At 72% percent of sales volumes, it has one of the highest shares of VAPs among tier-I peers. This reflects in its industry-leading EBITDA/tonne of Rs15,819. It recently secured a 50yr mining lease for the Roida-I iron ore and manganese block at Keonjhar (Odisha) and is expected to mine ~1.6m tonnes in FY26 and eventually use the 3m-tonne p.a. EC. This block would eventually replace the Tensa mine, whose quality/capacity is depleting. The Utkal B1 coal block is expected to commence in Q2, the third to be operational after Gare Palma IV/6 and Utkal C.

Outlook

As the company increases capacity long-term growth prospects are positive, with capex on schedule, FY26 volume guidance unchanged, industry-best EBITDA, net debt-to-EBITDA capped at 1.5x, the highest share of VAP, etc. We roll our estimates to FY28 and retain a Buy rating with a revised TP of Rs1,100 (Rs1,030 earlier).

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