Accumulate JSW Steel; target of Rs 1022: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on JSW Steel with a target price of Rs 1022 in its research report dated July 22, 2024.

Broker Research

July 23, 2024 / 12:53 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on JSW Steel

JSW Steel (JSTL) reported weak but in-line standalone operating performance in 1QFY25 led by muted demand and weak HRC pricing. Average realization increased 3% QoQ as weaker HRC prices negated higher long product prices. Std. sales volume declined 11% QoQ to 5.09mt, while exports stood at 10% of sales from Indian ops. As coking coal prices have declined and domestic steel pricing remains stable, margins are expected to improve in 2HFY25. Commissioning of both Vijayanagar and BPSL brownfield expansions is on track, and volume ramp-up can be expected from end3QFY25. We incorporate lower steel and coking coal prices, and cut EBITDA by ~5%/2% for FY25E/26E. We expect revenue/EBITDA/PAT growth of 17%/25%/51% over FY24-26E.

Outlook

At CMP, the stock is trading at 7.6x/6.2x EV of FY25E/FY26E EBITDA. We maintain ‘Accumulate’ rating with revised TP of Rs1,022 (earlier Rs1,026), valuing at 7x EV of Mar’26E EBITDA.

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