Jindal Steel Q4 Results Review - Beat On Top-Line Despite Margin Pressure: IDBI Capital

IDBI Capital Report

Jindal Steel and Power Ltd. revenue was ahead of our forecast. Revenue grew 15% QoQ to Rs 134.8 billion. Sales volumes increased by 11% QoQ to 2.01 million tonnes due to higher exports. The export contributed 11% to total volumes (versus 3% in Q3 FY24). However, Ebitda declined by 14% QoQ to Rs 24.4 billion due to lower realisation (down 5% QoQ) and high coking coal prices.

Value added products contributed 64% to sales in FY24 (versus 63% in FY23). Q4 FY24 PAT fell 52% YoY to Rs 9.3 billion due to impairment provision of Rs 3.6 billion of Australian mine.

We cut our FY25 Ebitda estimate by 4% and broadly maintain FY26 Ebitda forecast. We value the stock based on enterprise value/Ebitda multiple of six times FY26E Ebitda to derive a target price of Rs 863 (earlier Rs 742).

We maintain Hold rating on the stock given our neutral stance on the steel sector due to rising exports from China.

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