Edelweiss is bullish on Jindal Steel and Power has recommended buy rating on the stock with a target price of Rs 155 in its research report dated August 03, 2017.
Edelweiss' research report on Jindal Steel and Power
The Supreme Court (SC) acting on Central Empowered Committee’s (CEC) recommendation has allowed the Odisha government to recover up to 100% of the value of illegally mined iron and manganese ore from erring players. Accordingly, Sarda Mines (Sarda), the long-term supplier of Jindal Steel & Power (JSPL) has been held liable for INR 19.4bn, which could potentially fall on JSPL if the association between them is proven when SC hears JSPL’s on the issue of control over Sarda at a later date.
Despite a promising operating story, we believe, SC’s judgement will be an overhang on the stock. Further, an outflow of INR 21/share is likely to exacerbate the leverage and will be negative for cash flow in the near term. We will keep a tab on developments. We maintain ‘BUY/SO’ with an unchanged TP of INR 155.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.