Nuvama reduces target on Jindal Stainless amid soft export demand, higher imports

Jindal Stainless shares slipped over 20 percent in the past six months

Shares of Jindal Stainless are likely to grab limelight on March 24 after Nuvama Institutional Equities maintained a "buy" rating on the counter but cut target price to Rs 723 from Rs 836, saying that the company is navigating rough waters due to soft export demand and higher imports.

Nuvama analysts have trimmed their EBITDA estimates for FY25E, FY26E, and FY27E by 5 percent, 10 percent, and 13 percent, respectively, citing weaker sales volumes and narrower profit margins. "With exports under pressure and imports remaining firm, the company is being forced to channel volumes into lower-margin segments, which is dragging down overall profitability," the brokerage firm explained.

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Adding to the challenges, the company’s management has pushed back the timeline for its downstream operations at Jajpur by 8-9 months. Initially, these operations were expected to commence in the first half of FY27, but the delay signals potential operational hurdles.

In another key development, Anurag Mantri, the Executive Director and Group CFO of Jindal Stainless, has announced his resignation, effective April 4, 2025. Mantri has decided to step down in pursuit of new professional opportunities.

In Q3FY25, Jindal Stainless reported a 5.3 percent fall in profit, weighed down by lower prices amid discounted imports from China and rising operational costs. However, net revenue saw an 8.5 percent uptick to Rs 9,907 crore, while total expenses climbed 10 percent to Rs 9,102 crore.

Despite recent struggles, Jindal Stainless enjoys a favorable outlook from analysts. Of the nine brokerages covering the stock, all maintain a "buy" recommendation. However, market performance has been lackluster, with the stock slipping over 20 percent in the past six months, compared to a 10 percent decline in the benchmark Nifty 50 index.

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