'Add' Jindal Steel Shares Maintains PL Capital Post Strong Q1, Hikes Target Price — Here's Why
PL Capital has reiterated its 'Accumulate' stance and lifted the target price, citing improved earnings visibility and project ramp-ups.
In Q1 FY26, JSPL commissioned a 0.2mtpa continuous galvanizing line at Angul. BF#2 is expected to deliver first hot metal in Aug’25, with BOF#2 to be commissioned alongside it and BOF#3 in Q4 FY26. The slurry pipeline is on track for FY26 commissioning.
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PL Capital Report
Jindal Steel and Power Ltd. delivered strong cons operating performance in Q1 FY26 despite lower volumes. Volumes declined 9% YoY affected by early monsoon. Average net sales realisation rose 4.5% QoQ, driven by higher long and flats product prices and increase in value added products. Lower coking coal and PCI benefited Ebitda/tonne improving to Rs 15,680 (ex-fx gains).
Commissioning of BF-2 at Angul is in the final stages and hot metal production is expected to commence this month (delayed again) and BOF-2 is also nearing completion.
Management reiterated its earlier FY26 sales volume guidance of 8.5–9 mt. Monsoon-led demand weakness has pressured prices in recent weeks, which would weigh on near term earnings, though ramp-up of Angul blast furnace would partially offset the impact through higher volumes in H2.
Proportion of flats is also improving and is expected to touch 70% on full ramp up of Angul capex by end FY27E. We have tweaked FY26/27E Ebitda estimates by 5%/4% and expect Ebitda CAGR of 37% over FY25-27E.
At current market price, the stock is trading at 9.7x/6x EV of FY26E/27E Ebitda.
Maintain ‘Accumulate’ with revised target price of Rs 1,060 (earlier Rs 1,008) valuing at 6.5x EV of Mar’27E Ebitda.
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