BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Prabhudas Lilladher Report
We cut FY24/25E Ebitda estimates of Jindal Steel and Power Ltd. by 9%/7% on higher coking coal price assumption and delays in capacity addition respectively.
JSPL reported strong operating performance in Q2, driven by 9% QoQ volume growth in standalone business. Ebitda was in line with our estimates as lower than expected realisation was compensated by better volumes.
Average coking coal cost for Q2 was lower by ~$70/trillion QoQ which is expected to increase by ~$55/trillion in Q3.
JSPL is well poised to take dual benefit of volume growth and improvement in product mix over FY23-26E post commissioning of hot strip mill; however, there has been delays of few quarters in blast furnace commissioning which would impact FY25 volumes.
We have cut our FY25 volume assumption accordingly and introduce FY26 estimates. Incremental volumes from pellet plant and cost savings from captive coal mines would contribute to FY25 Ebitda margins.
We expect revenue/Ebitda/profit after tax compound annual growth rate of 7%/13%/23% over FY23- 26E. At current market price, stock is trading at six times/five times enterprise value of FY25E/FY26E Ebitda.
Retain ‘Buy' rating with revised target price of Rs 751 (earlier Rs 812) valuing at six times enterprise value of September-2025E Ebitda, as we roll forward.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
