Buy JSW Steel; target of Rs 1200: Motilal Oswal

Buy

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

JSTL reported consolidated revenue of INR432b (flat YoY and -4% QoQ), in line with our estimate of INR429b, as healthy NSR was offset by weak QoQ volume growth. Steel sales volumes stood at 6.69mt (+9% YoY and -11% QoQ), impacted by planned shutdowns at Dolvi and BPSL, while ASP stood at INR64,500/t (-8% YoY and +8% QoQ), led by price recovery. EBITDA stood in line with our estimate at INR75.8b (+38% YoY and +19% QoQ). EBITDA/t improved to INR11,324/t in 1QFY26, up 26% YoY and 33% QoQ (vs our est. of INR10,440/t). The improvement in EBITDA was driven by better NSR and lower coking coal costs. APAT stood at INR21.8b (+159% YoY and +43% QoQ; vs. our estimate of INR20b), aided by better operating profitability during the quarter. Consolidated crude steel production stood at 7.26mt (+14% YoY and -5% QoQ), impacted by planned maintenance shutdowns. Capacity utilization at Indian operations stood at 87% in 1QFY26 vs. 93% in 4QFY25. Institutional and retail sales volumes were higher 12% YoY. Domestic sales stood at 5.96mt, marking a 12% YoY increase, while exports fell 20% YoY and accounted for 7% of sales from Indian operations during 1QFY26.

At CMP, JSTL trades at 7.6x FY27E EV/EBITDA, and we largely maintain our FY26/FY27 EBITDA estimates. We reiterate our BUY rating on the stock with a TP of INR1,200 (premised on 8.5x EV/EBITDA on FY27 estimate).

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.