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Prabhudas Lilladher's research report on Jindal Steel and Power

Jindal Steel & Power (JSP) reported largely in-line cons operating performance in Q4FY25. Volumes grew 6% YoY, driven by higher capacity utilization and inventory liquidation amid stronger domestic demand. Blended NSR rose 0.5% QoQ due to weak pricing in long products, which constitute a higher proportion of the product mix (58%). Average coking coal costs declined by USD11/t during the quarter, which is expected to fall further by USD10–15/t in Q1FY26. Going forward, higher steel prices and lower RM cost to benefit H1FY26, however delay in ongoing capex at Angul is expected to limit volume growth and may result in market share loss. Commissioning of BF-2 at Angul has begun and hot metal delivery is expected in Q1FY26, but BOF-2 and slurry pipeline is expected to get commissioned in Q2FY26. Accordingly, mgmt. has guided for sales volumes of 8.5–9mt for FY26 which is on a lower side.

Outlook

We have cut our FY26/27E EBITDA estimates by 9%/7% and expect revenue/EBITDA/PAT CAGR of 22%/33%/55% over FY25-27E. At CMP, the stock is trading at 9.3x/5.8x EV of FY26E/FY27E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs 978 (earlier Rs963) valuing at 6.5x EV of Mar’27E EBITDA.

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Jindal Steel and Power - 02052025 - prabhu

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