Jindal Stainless Ltd. share price target

Jindal Stainless’ (JSL) Q2FY23 performance was ahead of street estimates. Sales volumes were up 5% YoY (14% QoQ) to an all-time high of 270.4kte.

Jindal Stainless (JSL) management meeting takeaways include: i) Exports can be maintained at 16,000tpm (down from peak run-rate of 30,000tpm) despite the export duty of 15%, mainly on account of higher margins in the US. ii) Blast furnace capex in JUSL is being reconsidered; leverage, holding on to the environmental benefits of running a secondary steel operation and investor feedback has played its part in our view.

We present a stock idea Jindal Stainless Ltd. (JSL), the gold standard in stainless steel and on the verge of business evolution, with a fair value of Rs260. With its merger with Jindal Stainless Hisar (JSHL), the merged entity will command a towering 55% share, with limited competition. JSL's port and raw material proximity, international finishing capabilities coupled with JSHL's strategically located facility in key domestic consumption centres will drive synergies in the merged entity. The doubling of JSL's steel melt shop capacity and expansion of JSHL's value added Special Product division should be a growth accelerator, with emerging sources of demand such as Auto, railways and infrastructure. JSL's...

Consolidated EBITDA was at | 569 crore, up 47% YoY and flattish QoQ, higher than our estimate of | 558 crore. Consolidated PAT was at | 515 crore, up 91% YoY and 3% QoQ, higher than our estimate of | 482 crore...

Consolidated EBITDA was at | 797 crore, up 68% YoY and 7% QoQ, higher than our estimate of | 740 crore. Consolidated PAT was at | 442 crore, up 160% YoY and 7% QoQ, higher than our estimate of | 408 crore What should investors do? Jindal Stainless' share price has given a return of...

Decline in Chinese stainless steel prices has compressed the converter spreads (Chart 1). We are not sure when exactly the spot will percolate into Jindal Stainless (JSL) or Jindal Stainless (Hissar) (JSHL) spreads, but we continue to build in ~Rs17,500/te of normalised spreads for FY23/24E (from Rs27,000/te expected in Q3FY22).