Motilal Oswal 's research report on JSW Steel
JSW Steel (JSTL)’s 2QFY21 results were impressive as consol EBITDA grew 85% YoY to INR42.5b, beating our estimates by 24%. The beat was led by lower costs, leading to standalone EBITDA/t of INR10,136 (est. INR8,754). We expect 3QFY21 margins to be even stronger as higher steel prices (HRC price currently is INR4,000/t higher than 2Q) and upward revision in fixed-price contracts should lead to higher realization. We raise our FY21E/FY22E EBITDA by 25%/5% to factor in higher realization. Maintain Buy.
Outlook
We value JSTL at 7.0x FY22E EV/EBITDA to arrive at TP of INR372/sh. Buy.
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