Buy Jindal Steel and Power; target of Rs 900: Motilal Oswal

Motilal Oswal is bullish on Jindal Steel and Power recommended buy rating on the stock with a target price of Rs 900 in its research report dated January 31, 2024.

Broker Research

February 07, 2024 / 19:04 IST

Buy

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Motilal Oswal's research report on Jindal Steel and Power

Revenue in 3QFY24 was down 6% YoY at INR117b, in line with our estimate of INR119b. ASP for the quarter stood at 64,648/t (down 1% YoY), which was INR2,932/t higher than our estimate of INR61,716/t. JSP production for 3QFY24 stood at 1.9mt and sales stood at 1.8mt (down 6% and 5%, respectively). The figures are in line with our estimated production and sales of 1.9mt each. EBITDA was up 20% YoY to INR28b, which was 34% above our estimate of INR21b. The beat was driven by better-than-estimated NSR and lower input cost as the benefits from captive thermal coalmine started materializing. EBITDA/t was up 26% YoY to INR15,705/t, which was INR4,692/t above our estimate of INR11,013/t. APAT improved 115% YoY to INR19b, against our estimate of INR9b. The beat was driven by improved operational performance, lower finance cost, higher other income, and negligible tax outgo.

Outlook

We maintain our BUY rating on JSP with an unchanged TP of INR900, based on 6x FY26E EV/EBITDA. The stock is currently trading at 5.2x FY26E EV/EBTIDA and 1.3x FY26E P/B.

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