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IDBI Capital Report
JSW Steel Ltd.'s Q3 FY24 Ebitda was slightly below our forecast. In Q3 FY24, its consolidated sales volumes stood at 6 million tonnes (lower by 5% QoQ) due to weak retail demand during the quarter.
Ebitda decreased by 9% QoQ led by higher coking coal prices. During Q3 FY24, net debt increased by Rs100 billion QoQ to Rs 792 billion led by higher working capital cost.
Further, JSW Steel plans to raise Rs 20 billion to meet short term and long-term working capital requirements.
We make minor changes to our FY24-25 forecasts and introduce FY26 estimates in this report.
We now value the stock at an enterprise value/Ebitda multiple of six times FY26 (earlier six times FY25) Ebitda to derive a target price of Rs 829 (earlier Rs 786) and maintain 'Hold' rating on the stock.
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