Anand Rathi has given Hold recommendation for JSW Steel with a target price of Rs. 757 in its research report issued on Jul 08, 2021
Anand Rathi’s research report on JSW Steel
Revenue from operations stood at ₹ 269,340 million an increase of 50.6 % YoY, supported by strong demand in both Indian and international markets and rise in steel prices. Q4FY21 Operating EBITDA at ₹ 84,400 million grew by 183.7% YoY. The Net profit after tax for the quarter was ₹ 41,910 million higher due to operating profit partially offset by higher taxes, interest costs, and one-time exceptional items. In FY21 JSW Steel reported consolidated revenues of ₹ 798,390 million up by 8.9% compared to last year. EBITDA increased by 69.6 % to ₹ 201,410 million on account of benefitting from decline in raw material and employee expenses and favourable product mix. The company reported PAT of 79,110 million as compared to last year of 40,300 million. Volumes went up marginally to 14.95 MT (14.90 MT in FY20). The Covid-19 related disruptions in Q1 FY21, were offset by strong rebound in demand in H2. For Q4FY21, on a standalone basis, the company reported sales volume of 4.06 MT (9.7% YoY), EBITDA/t came in at 19756/t (14444/t in Q3FY21 and 8703/t in Q4FY20).
We continue to monitor the performance and despite a healthy growth in recent quarters, maintain our HOLD rating on the stock with a revised target price of ₹ 757 based on 7x FY23E EV/EBITDA.