Jindal Steel & Power - Capacity Expansion To Propel Growth: Motilal Oswal

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.The ongoing capacity expansion at Angul (Odisha) will significantly enhance Jindal Steel and Power Ltd.’s crude steel capacity by over 65% to 15.9 million tonne. The planned expansion, which is expected to be completed by Q3 FY26, will catapult JSPL to the fourth largest steel manufacturer in India. Along with the capacity expansion, JSPL plans to strengthen its raw material integration, increase the share of captive power plant, increase the share of flat steel, and undertake product enrichment. The planned capex will result in volume growth and a reduction in structural costs. JSPL recently commissioned and dispatched its first rake from 6 mt hot strip mill at Angul in a record period of 30 months. This achievement enables the company to cater to key sectors such as automobile, construction, oil, GP, color coating, etc. In October 23, JSPL started production at Gare Palma IV/6 mines, which supply coal to its Raigarh facility. At the current mine, JSPL has already mined ~1 mt of coal in Q3 FY24 and as production ramps up, the mine can see increased raw material integration, which helps JSPL to accelerate its capacity expansion. In addition, JSPL has also commenced production at its Utkal C coal block within a record time of 12 months and the entire incremental benefits from this mine are expected to accrue in FY25E, which should further strengthen raw material integration. JSPL has followed a prudent deleveraging policy to strengthen its balance sheet. With net debt of ~Rs 91 billion in 9M FY24 and a net debt-to-Ebitda ratio at a comfortable level of 0.9 times, JSPL has one of the strongest balance sheets among the domestic ferrous manufacturers. The stock trades at 5.2 times FY26E enterprise value/Ebitda and 1.3 times FY26E price/book. We reiterate 'Buy' on the stock with a target price of Rs 900 (six times FY26E EV/Ebitda). Key downside risk: A delay in the commissioning of the remaining coal mines may delay cost synergies and margin improvement..Click on the attachment to read the full report:.Yum Restaurants To Exit Devyani International For Rs 814.8 Crore.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Jindal Steel & Power - Capacity Expansion To Propel Growth: Motilal Oswal

The ongoing capacity expansion is expected to increase the share of flat steel products to over 55%, with the focus on value added product flat steel products.

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