Motilal Oswal has given Buy recommendation for Jindal Steel and Power recommended buy rating on the stock with a target price of Rs 605 in its research with a target price of Rs. 605 in its research report issued on Mar 23, 2022

Motilal Oswal’s research report on Jindal Steel and Power

JSPL anticipates a steady domestic demand even at current price levels. The company does not expect any major demand destruction but believes there will be some demand deferrals due to the record high steel prices. The company has been able to secure significant orders from export markets especially in Europe, partly driven by the void created due to the Russia-Ukraine conflict and China’s policy of reducing exports. The management believes that steel demand can be deferred at the best but cannot be postponed forever. The utilization rate is currently at high levels, but the company does not expect major capacity additions at industry level in FY23/24. JSPL will likely commission 3mt HSM in Feb’23, which will increase the share of finished steel in the overall sales basket and improve the blended NSR.

Outlook

The stock trades at 3.6x/2.4x our FY23E/24E EV/EBITDA. We maintain our BUY rating with a TP of INR605 premised on 5x FY23E EV/EBITDA.

More Info

At 16:01 hrs Jindal Steel & Power was quoting at Rs 521.60, up Rs 10.70, or 2.09 percent.

It has touched an intraday high of Rs 529.40 and an intraday low of Rs 510.90.

It was trading with volumes of 453,600 shares, compared to its thirty day average of 480,258 shares, a decrease of -5.55 percent.

In the previous trading session, the share closed up 3.65 percent or Rs 18.00 at Rs 510.90.

The share touched its 52-week high Rs 514.30 and 52-week low Rs 297.25 on 23 March, 2022 and 25 March, 2021, respectively.

Currently, it is trading 1.42 percent below its 52-week high and 75.48 percent above its 52-week low.

Market capitalisation stands at Rs 53,207.80 crore.

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