Buy Jindal Steel; target of Rs 1200: Motilal Oswal

Motilal Oswal's research report on Jindal Steel

Jindal Steel (JINDALST) has successfully commissioned a new 3mtpa of crude steel capacity at its Angul plant, expanding the plant’s total steelmaking capacity to 9mtpa. Another 3mtpa expansion at Angul is scheduled for commissioning in FY26, which will bring JINDALST’s total capacity to 15.6mtpa (vs 9.6mtpa). This expansion will position JINDALST as the fourth-largest steel producer in India. Supported by the incremental capacity and improving domestic demand, we expect the company to witness ~14% CAGR in volume. Coupled with steady NSR growth, revenue is projected to witness a 17% CAGR over FY25-28.

Outlook

At CMP, the stock trades at 6.9x EV/EBITDA and 1.7x P/B on the FY27 estimate. We reiterate our BUY rating on JINDALST with a TP of INR1,200, based on 8x EV/EBITDA on FY27 estimate..