Buy Jindal Steel & Power; target of Rs 1090: Motilal Oswal

Motilal Oswal's research report on Jindal Steel & Power

JSP reported revenue of INR135b (-1.5% YoY/ +15% QoQ) in 4QFY24, which was above our est. of INR122b. ASP stood at INR67,099/t (flat YoY/ +4% QoQ) vs. our est. of INR62,821/t. EBITDA stood at INR24b (+12% YoY/-14% QoQ), below our est. of INR26b, due to higher cost. EBITDA/t came in at INR12,162/t (+12% YoY/-14% QoQ) vs. our est. of INR13,286/t. Coal costs rose USD10-20 per ton QoQ. APAT stood at INR9b (+52% YoY/-51% QoQ) vs. our est. of INR12.5b in 4QFY24. Production volume grew 2% YoY and 6% QoQ to 2.05mt (our est. 2.04mt). Sales volume was slightly above our est. at 2.01mt (-1% YoY/+11% QoQ). Exports share remained flat YoY at 11% of total revenue in Q4FY24.

Outlook

We maintain our BUY rating on JSP with a revised TP of INR1090, based on 6.5x FY26E EV/EBITDA. The stock is currently trading at 5.7x FY26E EV/EBTIDA and 1.6x FY26E P/B.