Motilal Oswal is bullish on Jindal Steel and Power has recommended buy rating on the stock with a target price of Rs 166 in its research report dated May 27, 2020.
Motilal Oswal 's research report on Jindal Steel and Power
JSP’s 4QFY20 result highlights the benefits of higher steel realizations and cost efficiencies in its steel operations. 4QFY20 consolidated EBITDA was up 22% QoQ (20% YoY) to INR22.2b (v/s est. INR19.6b) due to higher steel prices in Indian and Oman operations. JSP continues on the path of deleveraging as it reduced net debt by INR32b in FY20. We expect JSP to reduce its net debt by INR72b (INR71/share) over FY20-22E to INR307b from INR379b (incl. acceptances) at end-FY20.
This would be done through FCF generation led by higher EBITDA. Re-iterate Buy with an SOTP-based target price of INR166/share.
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