'Buy' Jindal Stainless Maintains ICICI Securities But Lowers Target Price — Here's Why

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ICICI Securities Report

Despite relatively stable profitability, Jindal Stainless Ltd. has underperformed its carbon steel players over the past 12 months, primarily due to the concerns on earnings growth. The concerns are perhaps not as severe as they are being made out to be. Sifting through the noise, we see:

1. Ebitda/tonne (overall) sustaining between Rs 19,000– 20,500/tonne;

2. volumes likely growing 10–11% p.a. through to FY27E;

3. lower impact from protectionism; and

4. subsidiaries being potentially value accretive FY26E onwards.

While we tone down our FY26E/FY27E EPS by 12%/11% owing to the low level of prices and inadequate recovery in export markets, our RoE estimate of 16–17% through to FY27 is still higher than the carbon steel players. Our revised target price works out to Rs 760 (earlier Rs 850). Maintain Buy.

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