Buy JSW Steel; target of Rs 1350: 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

×

On Dec 3rd, JSTL announced a strategic restructuring of the Bhushan Power and Steel Limited (BPSL) unit. As part of the transaction, BPSL (the step-down subsidiary of JSTL) will be transferred to JSW Sambalpur via a slump sale for a cash consideration of INR244.8b. JFE Steel Japan will invest a total of INR157.5b in two tranches for a 50% stake in the 50:50 JV. The transaction has been executed at an enterprise value of INR530b (INR315b of equity and INR210b of debt). As part of the deal, JSTL will receive INR320b in cash consideration. Its consolidated debt will reduce by ~INR350b (including INR50b of debt currently held by BSPL, which will also be removed from JSTL’s books). Out of INR320b, INR244b will be received by March, with the balance expected by September 2026, subject to approvals. The JV is expected to raise debt of INR210b, which will be used to pay off JSTL as part of the transaction.

At CMP, JSTL trades at 8.4x FY27E EV/EBITDA. We reiterate our BUY rating on the stock with a TP of INR1,350 (premised on 9x EV/EBITDA on Sep’27 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.