JSPL shares rise 4% as brokerages give thumbs up to firm's solid Q4 earnings, strong growth prospects

JSPL shares are up 30 percent in the year so far.

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26 Aug, 2025 12:21

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Jindal Steel and Power Ltd reported a solid Q4, driven by a robust domestic demand scenario and high steel prices. On top of that, the completion of most of its planned capex in FY25, at a time when demand and prices seem to be on the rise, has ushered positivity among brokerages.

As a result, several analysts across the Street have raised their earnings estimates for the company, with some even increasing their price targets for the stock to factor in the strong quarterly show.

Investors too cheered for the company and pushed shares of Jindal Steel and Power to a 52-week high of Rs 980 apiece, up over 4 percent on the NSE.

The steelmaker delivered a two-fold surge in its net profit for the March quarter at Rs 933 crore. Revenue showed muted growth at Rs 15,749 crore. However, Kotak Institutional Equities pointed out that revenue was optically higher on account of raw material transfers to Rashtriya Ispat Nigam due to their memorandum of understanding. Kotak expects this to remain one-off in nature.

In December last year, Jindal Steel signed an MoU with RINL to ensure the supply of liquid steel to its upcoming hot strip mill at Angul, Odisha.

Meanwhile, it was a spike in the company's EBITDA that impressed brokerages the most. During the quarter, the adjusted EBITDA came at Rs 2,512 crore, accounting for a one-off forex loss of Rs 68 crore. This strong EBITDA performance was propelled by a decrease in raw material costs, albeit partially countered by a decline in Net Sales Realization (NSR).

Furthermore, the management expects volumes to be better in FY25 in comparison to FY24. Morgan Stanley sees this commentary translating into good margin expansion for Jindal Steel in the coming quarter.

Besides, Nuvma Institutional Equities noted that Jindal Steel will commission most of its capacity in phases during FY25, lending visibility to volume growth. "The 19 percent steel volume CAGR, improvement in product mix with the commissioning of HSM (Hot Strip Mill) and benefits of captive coal and pellets along with a slurry pipeline would drive an EBITDA CAGR of 34 percent over FY24–26E to Rs 18,200 crore and EBITDA/tonne of Rs 16,700 in FY26," Nuvama wrote in its report.

Buoyed by this, Nuvama raised its price target for the stock by over 15 percent to Rs 1,185, while retaining its 'buy' call.

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Motilal Oswal Financial Services also raised its EBITDA estimates for Jindal Steel by 3-4 percent for FY25 and FY26 as it believes the company's capex would help it transition toward more value-added products, yielding better profitability. MOFSL has a 'buy' call on the stock with a price target of Rs 1,090.

Kotak Institutional Equities also highlighted that the company's growth capex continues to remain funded largely through internal accruals, keeping leverage at low levels. On that account, Kotak also raised its EBITDA by 2-3 percent for FY24-26, while revising its price target for the stock by 20 percent to Rs 1,080 along with a 'buy' rating.

Similarly, CLSA also raised its price target for Jindal Steel to Rs 940 as it kept its 'underperform' call intact. The firm anticipates strong steel prices to aid profitability for Jindal Steel. CLSA also feels that Jindal Steel looks best placed among ferrous names.

Morgan Stanley also painted a strong growth picture for Jindal Steel but chose to keep an 'underweight' call on the stock due to its expensive valuations. The brokerage has a price target of Rs 655 for the stock.

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