Moneycontrol Be a Pro
Get App
Last Updated : Nov 05, 2019 03:41 PM IST | Source: Moneycontrol.com

Buy Jindal Steel and Power; target of Rs 170: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Jindal Steel and Power has recommended buy rating on the stock with a target price of Rs 170 in its research report dated November 04, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on Jindal Steel and Power


Jindal Steel and Power (JSP) won Gare Palma IV/1 coal block in auction at Rs230/t. The coal block has extraction capacity of 6mtpa with reserves of ~160mnt. Before cancellation by the honorable Supreme Court in September-2014, the block was owned and operated by JSP to meet coal requirement of its sponge iron ore and CPP at Raigarh plant. Benefitted by proximity of mine to its plant and owned infrastructure, JSP was best placed to win the auction. We see the bid as a significant positive development for JSP as this would lower its coal cost by Rs1,300/t (for 6mtpa of coal) along with much needed raw material security in wake of severe shortage of domestic coal.


Outlook


We expect coal block to add Rs46bn (Rs46/share) to the equity value based on EV/EBITDA of 5.5x to the assumed cost saving of Rs8.3bn. Led by key positive change on cost and RM security, sharp increase in production and strong scope for improvement in Jindal Power, we upgrade the stock to BUY with TP of Rs170.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.
First Published on Nov 5, 2019 03:41 pm
Loading...
Follow us on
Available On