Jindal Steel and Power Ltd (JSPL) reported a robust performance for Q4, driven by strong domestic demand and high steel prices. The completion of most planned capital expenditures in FY25, coupled with the positive market conditions, has generated optimism among brokerages.
As a result, several analysts have revised their earnings estimates upwards and raised their price targets for the stock to reflect the company’s impressive quarterly results.
Investors responded positively to the news, pushing JSPL shares to a 52-week high of Rs 980 on the NSE, marking a gain of over 4 percent.
JSPL witnessed a two-fold increase in net profit for the March quarter, reaching Rs 933 crore, while revenue showed moderate growth at Rs 15,749 crore. However, Kotak Institutional Equities highlighted that the revenue figure was inflated due to raw material transfers to Rashtriya Ispat Nigam as per their memorandum of understanding, which is expected to be a one-off occurrence.
In December last year, JSPL signed an MoU with RINL to supply liquid steel to its upcoming hot strip mill in Angul, Odisha.
The highlight of JSPL’s performance was the significant spike in adjusted EBITDA during the quarter, reaching Rs 2,512 crore, despite a one-off forex loss of Rs 68 crore. This strong EBITDA performance was attributed to lower raw material costs, partially offset by a decline in Net Sales Realization (NSR).
Management’s positive outlook for FY25 volume growth has further boosted confidence among analysts. Morgan Stanley expects this to translate into favorable margin expansion for JSPL in the upcoming quarters.
Nuvma Institutional Equities emphasized JSPL’s capacity commissioning in phases during FY25, projecting a 34 percent EBITDA CAGR over FY24–26E. Buoyed by this, Nuvma raised its price target for the stock by over 15 percent to Rs 1,185, reiterating its ‘buy’ recommendation.
Motilal Oswal Financial Services also raised its EBITDA estimates for JSPL, anticipating better profitability from the company’s transition to more value-added products. MOFSL maintains a ‘buy’ rating on the stock with a price target of Rs 1,090.
Kotak Institutional Equities commended JSPL’s prudent capital allocation, keeping leverage at low levels. Accordingly, Kotak raised its EBITDA estimates and revised the price target for the stock by 20 percent to Rs 1,080, maintaining a ‘buy’ rating.
CLSA raised its price target for JSPL to Rs 940, expecting strong steel prices to drive profitability. However, the firm retained its ‘underperform’ rating, citing concerns about expensive valuations.
Morgan Stanley remained cautious despite acknowledging JSPL’s growth prospects, maintaining an ‘underweight’ rating with a price target of Rs 655.
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