Jindal Stainless Ltd. share price target

Jindal Stainless’ (JSL) Q3FY23 performance was 22% ahead of our and street estimates. Key points: 1) Sales volumes were up 33% YoY (22% QoQ) to an all- time high of 330.4kte aided by the rolling of third-party stainless steel flats; 2) blended realisation however was down 13% QoQ tracking international raw material prices and higher hollow-ware sales in the domestic market.

We hosted Jindal Stainless’ (JSL) management for a roadshow in Mumbai (on Dec 19, 2022). Key takeaways: 1) Expect volume CAGR of ~20% by FY25; 2) expect FY23 EBITDA margin to sustain at Rs18,000-20,000/te.

We attended the analyst call of Jindal Stainless’ (JSL) to discuss the Q2FY23 performance.

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...