Jindal Steel Ltd. share price target

It has announced an INR180b capex at Angul to expand its Steel capacity by 85% to 15.9mtpa by FY25, at a very competitive cost of ~USD390/t. With the proposed sale of Jindal Power (JPL), JSP would become a pure play Indian Steel company, which should also aid in better value discovery as the Steel business is still under-valued at 4.1x FY23E EV/EBITDA. We raise our FY22E/FY23E EBITDA by 15%/11% to factor in strong Steel prices. Despite the announced capex, we expect net debt to fall further to INR126b (excluding the ~INR50b net debt reduction from the Power...

comes at Rs92bn (Rs27mn/MW), considering present value of preference shares of Rs70.5bn (redeemable after 20 years) at Rs40.5bn, debt transfer of Rs21bn and equity component of Rs30.2bn. Valuation is broadly in line with our estimate. We believe that funding of equity component would be a concern in near term, as it could increase pledging of shares by promoter and may add unwanted risk to the stock. We remain positive on steel sector given the structural supply restrictions in China and improved demand. However, due to limited upside potential, we downgrade JSP to Accumulate with TP of...

We have taken a non-consensus call on the steel industry and recommend SELL on all Indian steel players with more than 25% downside from current levels.

Strong FCF generation drive fall in Net debt by 11%/Rs33bn QoQ at Rs256bn Jindal steel & Power's (JSP) Q3FY21 EBITDA beat our/consensus estimates by 5%/25% on the back of strong margins. We expect margins to further improve by Rs2,500/t QoQ, led by higher prices and stable costs. JSP reduced net debt by 33%/Rs151bn over last five years through organic route. Trajectory would sustain at Rs30bn/year for next couple of years on...

JPL the highest bidder in Gare Palma IV/1 coal block auction Jindal Power Limited (JPL), subsidiary of Jindal Steel and Power (JSP), emerged as the highest bidder in the auction of the 6mtpa Gare Palma IV/1 coal block at 25% of the coal price based on the National Coal Index. We estimate average savings of ~INR750/t JSP IN on 6mt coal, implying savings of INR4.5b/year. Assigning a 5x EBITDA multiple could...

Jindal Steel & Power (JSPL) reported highest ever consolidated EBITDA of Rs27 bn (+78% YoY) driven by strong volume growth, higher realizations and operating efficiencies. JSPL's Oman operations are now classified as Discontinued operations. Hence, our Q2FY21 estimates are not comparable to the reported results. JSPL's consolidated debt fell by Rs70 bn to Rs289 bn in 1HFY21 due to Oman divestment and...

Jindal steel & Power's (JSP) Q1FY21 adj. EBITDA came ahead of our/consensus estimates by 12%/22% at Rs22.6b, led by domestic steel and Jindal power (JPL). EBITDA of Domestic steel/JPL rose 9%/11% QoQ (+6%/+2%YoY). Aided by better operating performance and lower interest cost, cash profit rose 2% QoQ/19% YoY at Rs12.6bn (PLe:10.0bn). JSP reduced net debt by 25%/Rs115bn over last four years. Trajectory would...

23 July 2020 Jindal Steel and Power (JSP)s 1QFY21 result highlights the benefit of cost reduction in its steel operations. EBITDA was up We raise JSPs FY21/FY22 EBITDA estimates by 6%/5% to factor cost reduction demonstrated by the company. We expect JSP to reduce its net debt by INR83b (INR81/sh) to INR296b over FY2022E. The Oman divestment would reduce debt by an additional ~INR60b. of insurance claim higher volumes and cost reduction in standalone operations. The beat on estimates was led by lower-than-expected costs in standalone operations. Adj. PAT stood at INR1.0b (v/s est.

estimates by 11%/9% at Rs22.2b, led by higher margins in India and Shadeed steel operations. EBITDA of Domestic steel/Shadeed/Jindal power (JPL) rose 16%/93%/30% QoQ (+8%/+82%/25% YoY). Aided by lower interest cost, quarter turned black with PBT (before exceptional) of Rs1.9bn (PLe:loss of Rs1.5bn) against loss of Rs2.0bn/Rs4.0bn in Q3FY20/Q4FY19....

JSPL produced 550kt steel and related products during Apr20 (up 5% YoY). This was on the back of record high production from the Angul Blast Furnace, which produced 298kt hot metal, clocking 10kt daily. Though domestic demand remained dry during the month, production was boosted by large export orders, primarily of billets from China due to the shortage Apr20 sales stood at 335kt, of which 248kt (74% of total) were exports. The balance production in Apr20 is at the ports, waiting to be exported out; sales We note that while these export volumes would earn lower EBITDA margins (likely ~INR5,000/t), it is still positive as this should help recover fixed costs if plants earn positive cash flows, which is critical in this environment. JSPLs Oman operations reported production of 106kt, down ~40% over the normal monthly run-rate. However, the decline in sales volumes was lower at 33%.