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Emkay Global Financial's research report on Jindal Steel and Power

JSP reported adjusted EBITDA of Rs24.8bn (+9.8% vs Emkay; +1.5% vs consensus; +16.4% QoQ), led by lower coking coal cost and sequentially better production and sales volume of 2.1mt. The mgmt highlighted that BF2 project is on track to deliver the first hot metal in Q1FY26, while the remaining projects are progressing well as per the scheduled timelines. Decline in net working capital led to net debt-to-EBITDA declining to 1.3x from 1.4x in Q3, despite the Rs23.1bn capex in Q4. For FY26, the management expects crude steel production at 9.0-10.0mt, driven by the new BF at Angul and higher utilization of existing capacity, while sales volumes are targeted at 8.5-9.0mt. We reiterate REDUCE as we expect potential cuts to consensus earnings owing to a slower ramp-up, with the project guided to achieve utilization of only ~20% in FY26.

Outlook

We reiterate REDUCE; TP unchanged at Rs 825. We revised down our EBITDA estimates by 3-4% for FY26/27 owing to guidance coming in lower than our earlier estimates. We reiterate REDUCE as we expect potential cuts to consensus earnings owing to a slower ramp-up with the project guided to achieve utilization of only ~20% in FY26.

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Jindal Steel and Power - 02052025 - emkay

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