Jindal Steel and Power
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr(%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV
EV/EBITDA (x)
Div. Yield (%)
2021E
388.6
147.6
62.7
61.4
-1,246
312
19.6
16.7
0.0
7.3
1.4
4.6
0.0
2022E
470.4
150.0
68.3
66.9
9
379
19.4
17.2
0.0
6.7
1.2
4.2
0.0
2023E
466.7
130.4
57.9
56.7
-15
436
13.9
14.0
0.0
7.9
1.0
4.5
0.0
14 May 2021
4QFY21 Results Update | Sector: Metals
CMP: INR457
Deleveraging to continue on strong earnings
Announced Steel capex improves the growth outlook
JSP IN
1,020
465.8 / 6.3
502 / 84
16/97/352
3275
TP: INR550 (+20%)
Buy
JSP achieved its highest ever Steel EBITDA/PAT of INR48.8b/INR27.7b in
4QFY21, supported by a strong pricing environment. Consolidated net debt
fell further by INR34.7b QoQ to INR224b, implying a net debt/EBITDA of
1.53x.
It has announced an INR180b capex at Angul to expand its Steel capacity by
85% to 15.9mtpa by FY25, at a very competitive cost of ~USD390/t.
With the proposed sale of Jindal Power (JPL), JSP would become a pure play
Indian Steel company, which should also aid in better value discovery as the
Steel business is still under-valued at 4.1x FY23E EV/EBITDA.
We raise our FY22E/FY23E EBITDA by 15%/11% to factor in strong Steel
prices. Despite the announced capex, we expect net debt to fall further to
INR126b (excluding the ~INR50b net debt reduction from the Power
divestment) by Mar’23E. Reiterate
Buy.
JSP reported strong 4QFY21 earnings, with consolidated revenue/adjusted
EBITDA/PAT rising 13%/15%/23% QoQ to INR119b/INR52.9b/INR29.4b (est.
+3%/+1%/+18%).
Steel (standalone)
revenue/EBITDA/PAT
rose 19%/25%/16% QoQ to
INR104.3b/INR48.8b/INR27.7b (est. +6%/+3%/+4%).
Steel sales (excluding pig iron) rose 2% QoQ to 1.81mt (+36% YoY). Pellet
sales declined 28% QoQ to 0.29mt due to higher internal consumption.
Blended Steel realization improved by ~INR8,452 (17%) QoQ to INR57,481
(est. INR54,794/t) due to better than expected product mix. However, the
increase in realization was partly offset by higher iron ore cost and other
expenses. As a result, EBITDA/t improved by 23% QoQ to INR26,915 (est.
INR26,318) – including ~INR6,000/t benefit from the utilization of Sarda iron
ore inventory, which gets exhausted in 1QFY22.
Power (subsidiary JPL)
EBITDA increased 4% YoY to INR3.5b, even as revenue
rose 50%, due to a likely write-off of surcharge receivable as reported in
3QFY21. Sales volume PLF declined to 53% (v/s 56% in 3QFY21). Realization
improved 2% QoQ to INR3.8/kwh. EBITDA/kwh came in at INR1/kwh.
Consolidated net debt (reported) declined further by INR34.7b QoQ to
INR224b, implying a net debt/EBITDA of 1.53x.
Standalone revenue/EBITDA/PAT grew 27%/123%/10x YoY in FY21 to
INR332b/INR129b/INR66b on the back of greater (~21%) Steel sales (6.9mt),
higher Steel prices, and benefit from free of cost Sarda iron ore inventory.
Consolidated OCF/FCF stood at INR120b/INR111b in FY21, up 4%/13% YoY.
Highest ever EBITDA/PAT on the back of strong Steel margin
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-21 Dec-20 Mar-20
60.5
60.5
60.5
16.9
15.4
12.4
11.0
11.5
13.4
11.6
12.6
13.8
FII Includes depository receipts
Announced capacity expansion, deleveraging continues
JSP has announced an expansion of its 6mtpa Angul plant to 13mtpa by FY25
– 1mtpa through debottlenecking in FY22 and a 6.3mtpa brownfield
expansion in phases by FY25.
Amit Murarka - Research analyst
(Amit.Murarka@motilaloswal.com)
Research analyst - Basant Joshi
(Basant.Joshi@motilaloswal.com);
Jayant Gautam
(Jayant.Gautam@motilaloswal.com)
14 May 2021
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Jindal Steel and Power
This would entail a capex of INR180b spread over the next five years. Expansion
capex for FY22/FY23/FY24 is likely to be INR24b/INR47b/INR43b.
Net debt reduced further in Apr’21:
JSP has further reduced its net debt by
INR28.1b to INR193.2b as of 11
th
May’21. Net debt had fallen by INR138b in
FY21 to INR221b.
Iron ore availability not a constraint for JSP:
The company is likely to exhaust its
free Sarda iron ore inventory in 1QFY22. The management is confident of
replacing the same with iron ore from NMDC, OMC (has LTA), and other Odisha
miners, though it would of course increase raw material cost from 2QFY22.
Supported by higher prices, we expect Steel margin to be strong in the near
term after exhaustion of Sarda iron ore inventory.
The announced 85% expansion in Steel capacity to 15.9mtpa in phases by FY25,
at a competitive cost of ~USD390/t, should be RoCE accretive and improves the
growth outlook of the business.
Our TP of INR550/share is based on 5x FY23E EV/EBITDA for the Steel business
and announced deal valuation for the Power business. At the CMP, the stock
trades at an attractive 4.2x FY23E EV/EBITDA for the Steel business.
FY20
FY21
FY20
FY21
Var.
2Q
3Q
4Q
1Q
2Q
3Q
4Q
4QFY21E
(%)
89.4 93.0 88.1
74.6
89.8
105.3
118.8 370.0
388.6
115.7
3
-10.4
-2.8 -13.3
-24.9
0.5
13.3
34.8
-6
5
31.3
16.4 18.2 22.2
20.8
28.1
45.8
52.9
78.5
147.6
52
1
-25.6 -12.4 20.3
-4.2
71.2
151.7
138.2
-6.6
87.9
136.5
10.3 10.0 10.1
9.2
8.0
7.3
6.4
41.5
30.9
7
-6
10.4 10.2 10.5
8.6
8.7
8.7
8.5
41.6
34.5
9
-3
0.0
0.0
0.2
0.0
0.2
3.7
0.2
0.3
4.1
0
-4.3
-2.0
1.9
3.0
11.6
33.5
38.2
-4.3
86.3
37
3
0.0
0.0
1.8
1.2
0.2
-5.0
-9.7
1.8
-13.3
0.0
-4.3
-2.0
3.7
4.2
11.8
28.5
28.5
-2.5
73.0
37.0
-23
-0.3
0.2
0.6
1.3
2.8
4.2
9.5
1.5
17.7
10.2
-4.0
-2.2
3.1
2.9
9.0
24.3
19.0
-4.0
55.3
26.7
-29
0.0
0.0
0.0
0.8
0.6
1.8
-0.7
-0.4
2.5
1.8
-3.0
-2.2
2.2
1.2
8.3
23.9
29.4
-5.5
62.7
25.0
18
-440.7 767.6 198 1195.8 -374.7 -1164.9 1220.7 -272.4 -1245.3
1022.1
6.1
8.2 12.4
11.6
20.3
42.2
46.7
37.3
120.8
45.7
2
Source : MOFSL estimates; FY20 includes Oman operations, hence not comparable
FY21
2Q
3Q
78.5
87.4
42,833
49,029
19.5
31.6
24.3
39.1
13,247
21,929
5.5
5.3
5.7
5.7
0.1
0.0
13.2
28.1
0.1
-1.7
13.2
26.4
3.3
4.2
24.7
15.8
10.0
22.3
9.9
24.0
FY20
262.3
46,015
-5.4
57.8
10,136
26.1
22.9
0.0
8.8
0.0
8.8
2.6
29.8
6.2
6.2
FY21
331.8
48,005
26.5
129.3
18,704
21.9
22.4
0.1
85.1
6.1
91.2
19.6
21.5
71.5
65.8
Margin to stay strong, expansion improves the growth outlook
Consolidated performance (INR b)
Y/E March
Net sales
Change (YoY, %)
EBITDA
Change (YoY, %)
Interest
Depreciation
Other income
PBT (before EO item)
Extra-ordinary income
PBT (after EO item)
Total tax
Reported PAT
MI - Loss/(Profit)
Adjusted PAT
Change (YoY, %)
Cash profit (pre-tax and MI)
1Q
99.5
2.9
21.7
-4.5
11.1
10.5
0.0
0.1
0.0
0.1
1.0
-0.9
0.0
0.1
-94.8
10.6
Standalone quarterly performance
Y/E March
Net sales
NSR (INR/t)
Change (YoY, %)
EBITDA
INR/t
Interest
Depreciation
Other income
PBT (before EO item)
Extra-ordinary income
PBT (after EO item)
Total tax
Tax (%)
Reported PAT
Adjusted PAT
1Q
70.8
49,544
5.2
16.1
11,245
7.0
5.7
0.0
3.4
0.0
3.4
1.2
34.9
2.2
2.2
FY20
2Q
3Q
65.7
66.4
49,420 41,244
-4
-1.3
12.6
13.5
9,437
8,398
6.6
6.3
5.8
5.7
0.0
0.0
0.2
1.5
0.0
0.0
0.2
1.5
0.0
0.5
4.7
34.3
0.2
1.0
0.2
1.0
INR m
4QFY21E
98.8
54,794
66.5
47.4
26,318
5.0
5.6
0.0
36.8
0.0
36.8
10.2
27.7
26.6
26.6
4Q
59.3
44,589
-19.9
15.6
11,746
6.2
5.7
0.0
3.7
0.0
3.7
0.9
24.3
2.8
2.8
1Q
61.6
41,569
-13
17.1
11,525
6.0
5.6
0.0
5.4
1.2
6.6
1.6
23.8
5.0
4.1
4Q
104.3
57,481
75.9
48.8
26,915
5.0
5.5
0.0
38.4
6.5
44.9
10.6
23.7
34.3
27.7
Var.
(%)
6
5
3
2
0
-3
4
22
29
4
Source: MOFSL
14 May 2021
2
 Motilal Oswal Financial Services
Jindal Steel and Power
Standalone operational performance
Sales volumes
Change (YoY, %)
Change (QoQ, %)
Realization
Change (YoY, %)
Change (QoQ, %)
EBITDA (INR/t)
Change (YoY, %)
Change (QoQ, %)
1Q
1,430
20.2
-1.4
49,544
-6.0
3.1
11,245
-18.7
13.2
FY20
2Q
1,330
3.9
-7.0
49,420
0.2
-0.2
9,437
-16.8
-16.1
3Q
1,610
34.2
21.1
41,244
-21.8
-16.5
8,398
-31.9
-11.0
4Q
1,330
-8.3
-17.4
44,589
-7.3
8.1
11,746
18.3
39.9
1Q
1,482
3.6
11.4
41,569
-16.1
-6.8
11,525
2.5
-1.9
FY21
2Q
1,834
37.9
23.7
42,833
-13.3
3.0
13,247
40.4
14.9
3Q
1,782
10.7
-2.8
49,029
18.9
14.5
21,929
161.1
65.5
4Q
1,815
36.4
1.8
57,481
28.9
17.2
26,915
129.1
22.7
Exhibit 1: Standalone Steel volumes and production (kt)
Steel sales
Steel production
Volume growth continues
Source: MOFSL
Exhibit 2: Spreads and EBITDA/t
EBITDA/t at fresh highs on
record high spreads
EBITDA per ton (INR 000)
25
9
26
10
28
9
26
9
27
10
30
13
31
14
28
11
30
12
27
10
27
11
26
9
Spreads (INR 000/t)
30
22
8
12
36
25
12
27
13
22
42
27
Source: MOFSL
Highlights from the management interaction
Announced Angul capacity expansion to 13mtpa from 6mtpa
JSP has announced expansion of its 6mtpa Angul plant to 13mtpa by FY25 –
1mtpa through debottlenecking in FY22 and a 6.3mtpa brownfield expansion in
phases by FY25.
This would entail capex of INR180b spread over the next five years. Expansion
capex for FY22/FY23/FY24 is likely to be INR24b/INR47b/INR43b.
Expansion capex is competitive and significantly lower than benchmark capex
due to the brownfield nature of expansion as well as lower downstream
capacities at this point in time.
Expansion would involve setting up of a 4.25mt blast furnace, BOF – 3.3mt, DRI
– 2.7mt, EAF – 3mt, and 5.5mt hot strip mill at the downstream end.
Steelmaking capacity projected at the end of each year is likely to be: FY22 –
9.6mtpa, FY24 – 12.9mtpa, and FY25 – 15.9mtpa.
14 May 2021
3
 Motilal Oswal Financial Services
Jindal Steel and Power
Pellet capacity projected at the end of each year is likely to be: FY21 – 9mtpa
(actual), FY23 – 15mtpa, and FY24 – 21mtpa.
JPL’s proposed divestment
The objective of divestment is to improve focus on its core Steel business, pare
down debt, and reduce its carbon footprint. JSP would receive INR30b in cash
against transfer of its stake in JPL to WorldOne, a promoter group entity. The
promoter would not pledge shares of JSP to fund this cash commitment and
rather targets to revoke its entire pledged shares by FY22-end.
JSP owes INR43.8b to JPL, which were taken as loans (~INR15b) and advance
(~INR29b) for transfer of a Power plant from JPL to JSL. The same has been
converted into an unsecured loan (interest rate of 9.7%), which will be repaid in
three installments from years five to seven. In addition to this, JSP holds 5%
non-convertible redeemable preference shares of INR70.5b in JPL, issued in
3QFY21, of which INR40.5b is cumulative. The preference shares are
redeemable after 15 years and within a maximum period of 20 years.
JSP would gain 80% voting rights on default in payment of coupons twice.
Other highlights
Net debt reduced further in Apr’21:
JSP has further reduced its net debt by
INR28.1b to INR193.2b as of 11
th
May’21. Net debt had fallen by INR138b in
FY21 to INR221b.
The company has remitted USD241m (INR17.7b) to lenders of JSPML and Jindal
Steel and Power (Australia).
Iron ore – not a constraint for JSP:
It is likely to exhaust its free Sarda iron ore
inventory in 1QFY22. The management is confident of replacing the same with
iron ore from NMDC, OMC (has LTA), and other Odisha miners, though it would
increase raw material cost from 2QFY22.
Diversion of oxygen for medical purposes is likely to impact production by ~10%.
However, the management is confident of achieving production of 8mt in FY22.
Due to weak domestic demand, the share of exports is likely to remain high in
FY22 ~35%.
14 May 2021
4
 Motilal Oswal Financial Services
Jindal Steel and Power
Exhibit 3: JSPL’s capacity expansion plan
Exhibit 4: JSPL’s capacity expansion timelines
Source: Company
Source: Company
14 May 2021
5
 Motilal Oswal Financial Services
Jindal Steel and Power
Valuation and view
Expansion to sustain volume outperformance:
Despite the COVID-19 pandemic,
JSP’s Steel volumes grew 21% in FY21, implying 88% utilization. The announced
85% expansion in Steel capacity to 15.9mtpa in phases by FY25, at a competitive
cost of ~USD390/t, should be RoCE accretive and further support volume
outperformance in the longer term.
EBITDA margin to stay strong:
With rebar prices rising ~50% in the last six-
months, we expect margin for the Steel business to stay strong in the near term.
Even after the exhaustion of zero cost Sarda iron inventory (in 1QFY22), we
expect Steel EBITDA margin to be over INR14,000/t (v/s average of ~INR9,500/t
in FY16-20) due to better sales mix and gains in operating leverage (over 90%
plant utilization).
JPL divestment to increase focus on the Steel business:
JSP has announced the
sale of its Power business – JPL – at an enterprise value (EV) of ~INR95b. While
we find the deal value, implying ~5x FY22E EV/EBITDA, a bit underwhelming, it
does improve the growth outlook for the Steel business by freeing up both the
Balance Sheet and management bandwidth. By hiving off thermal Power plants
and reducing its carbon footprint, access to global capital should improve for
JSP.
Deleveraging at comfortable levels:
Led by strong EBITDA growth, limited
capex, and Oman divestment proceeds, consolidated net debt has declined to
INR224b in Mar’21, implying net debt/EBITDA of 1.53x. Despite the announced
capex, we expect net debt to fall further to INR126b (excluding the ~INR50b net
debt reduction from the Power divestment) by Mar’23E.
Valuation remains comfortable:
Our TP of INR550/share is based on 5x FY23E
EV/EBITDA for the Steel business and announced deal valuation for the Power
business. At the CMP, the stock trades at an attractive 4.2x FY23E EV/EBITDA for
the Steel business.
Exhibit 5: Target price calculation
Y/E March
Steel business
A. EBITDA
B. Target EV/EBITDA (x)
C. EV (A*B)
Jindal Power (JPL)
D. PV of JPL's FCFF
Consolidated
EBITDA
E. Enterprise value (C+D)
F. Net debt
G. CWIP
Equity value (E-F)
Target price (INR/share)
FY17
36,133
FY18
50,351
FY19
72,496
FY20
66,418
FY21
1,30,002
FY22E
1,31,951
FY22E
1,07,621
5.0
5,38,105
95,000
46,613
4,61,427
64,691
4,38,319
84,056
4,10,943
78,539
3,78,846
1,47,592
1,30,408
6,33,105
2,21,460
1,73,870
1,26,399
8,903
33,903
56,903
5,63,609
550
Source: MOFSL, Company
1,50,000
14 May 2021
6
 Motilal Oswal Financial Services
Jindal Steel and Power
Story in charts
Exhibit 6: Sales* to increase by ~12% CAGR over FY20-23E
Sales (mt)
6.9
5.1
3.4
3.4
3.8
5.7
7,281
8,620
7.4
7.9
10,567
Exhibit 7: EBITDA/t to remain strong in the medium term
EBITDA/t
11,752
18,704 18,048
13,794
10,136
FY16
FY17
FY18
FY19
FY20
FY21E FY22E FY23E
FY16
FY17
FY18
FY19
FY20
FY21E FY22E FY23E
Source: Company, MOFSL
Source: Company, MOFSL; *excluding pig iron
Exhibit 8: JPL’s Power generation trend
Gross generation (m units)
44.0%
32.6% 31.1% 34.6% 35.0% 32.2%
PLF (%)
53.2%
47.8%
Exhibit 9: Consolidated EBITDA to remain strong
EBITDA (INR b)
147.6
150.0
130.4
34.4
46.6
64.7
84.1
78.5
FY16
FY17
FY18
FY19
FY20
FY21E FY22E FY23E
Source: Company, MOFSL
FY16
FY17
FY18
FY19
FY20
FY21E FY22E FY23E
Source: Company, MOFSL
Exhibit 10: FCF generation to remain strong despite capex
OCF post interest
capex
75
5
28
3
25
-1
-26
38
24
-9
FCF
97 88
78
100
48
47
Exhibit 11: Net debt to halve over FY21-23E
13.5
9.9
Net Debt (INR b)
Net debt/EBITDA (x)
59
6.8
4.9
4.6
1.5
1.2
1.0
-34
-39
-25
-14
-17
-30
-53
Source: Company, MOFSL
Source: Company, MOFSL
14 May 2021
7
 Motilal Oswal Financial Services
Jindal Steel and Power
Financials and valuations
Consolidated Income Statement
Y/E March
Net sales
Change (%)
Total Expenses
EBITDA
% of Net Sales
Depn. and Amortization
EBIT
Net Interest
Other income
PBT before EO
EO income
PBT after EO
Tax
Rate (%)
Reported PAT
Minority interests
Preference dividend
Share of Associates
Adjusted PAT
Change (%)
FY16
1,83,709
-8.9
1,49,299
34,410
18.7
28,194
6,216
32,808
2,200
-24,391
-2,358
-26,750
-6,763
25.3
-19,987
-980
0
-14
-16,662
-363.0
FY17
2,10,194
14.4
1,63,581
46,613
22.2
39,490
7,122
34,240
411
-26,706
-3,723
-30,429
-5,027
16.5
-25,402
-2,524
0
27
-19,128
14.8
FY18
2,76,244
31.4
2,11,553
64,691
23.4
38,830
25,861
38,657
29
-12,767
-5,874
-18,641
-2,398
12.9
-16,243
-2,064
0
87
-8,218
-57.0
FY19
3,93,721
42.5
3,09,666
84,056
21.3
41,938
42,118
42,642
157
-367
-27,650
-28,017
-3,902
13.9
-24,115
-7,644
0
0
3,178
-138.7
FY20
3,69,955
-6.0
2,91,416
78,539
21.2
41,604
36,935
41,493
262
-4,296
1,838
-2,458
1,539
-62.6
-3,996
2,096
0
0
-7,929
-349.5
FY21
3,88,625
5.0
2,41,034
1,47,592
38.0
34,533
1,13,058
30,933
4,137
86,262
-13,305
72,957
17,687
24.2
55,269
2,548
0
0
62,738
-1,245.6
FY22E
4,70,364
21.0
3,20,363
1,50,000
31.9
34,085
1,15,916
22,950
92,966
0
92,966
23,387
25.2
69,579
1,274
0
0
68,305
8.9
FY23E
4,66,673
-0.8
3,36,265
1,30,408
27.9
34,305
96,104
17,064
79,040
0
79,040
20,977
25.2
58,062
195
0
0
57,868
-15.3
(INR m)
FY23E
1,020
4,43,299
4,44,319
-7,308
1,83,232
69,297
6,89,540
8,67,786
3,54,467
5,13,319
56,903
5,001
1,443
2,23,997
76,713
33,242
56,832
57,208
1,11,122
38,357
72,766
1,12,874
6,89,540
(INR m)
Consolidated Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Goodwill and Revaluation
Investments
Curr. Assets
Inventory
Account Receivables
Cash and Bank Balance
Loans and advances and others
Curr. Liability and Prov.
Account Payables
Provisions and Others
Net Current Assets
Appl. of Funds
FY16
915
1,80,556
1,81,471
8,003
4,70,132
13,477
6,73,082
6,27,116
1,78,233
4,48,883
1,18,266
5,485
3,577
1,59,182
32,360
14,292
6,204
1,06,326
62,310
42,186
20,124
96,872
6,73,082
FY17
915
2,99,590
3,00,505
6,467
4,66,571
53,586
8,27,129
7,83,127
1,29,476
6,53,651
97,162
5,670
3,677
1,45,820
35,993
17,166
5,144
87,517
78,850
22,221
56,629
66,970
8,27,129
FY18
968
3,02,878
3,03,846
4,403
4,43,104
50,284
8,01,638
8,46,580
1,68,002
6,78,578
49,775
5,922
1,458
1,56,572
49,596
18,261
4,786
83,930
90,667
28,434
62,233
65,905
8,01,638
FY19
968
3,23,309
3,24,276
-3,011
4,15,227
53,643
7,90,135
9,00,003
2,09,940
6,90,063
40,272
6,164
1,452
1,57,902
65,095
30,292
4,284
58,231
1,05,718
32,087
73,631
52,184
7,90,135
FY20
1,020
3,20,351
3,21,371
-7,764
3,88,364
56,225
7,58,196
9,50,772
2,51,544
6,99,228
19,745
6,098
1,430
1,70,917
63,687
35,493
9,519
62,219
1,39,222
35,651
1,03,571
31,695
7,58,196
FY21
1,020
3,17,127
3,18,147
-8,777
2,93,232
62,393
6,64,994
8,32,786
2,86,077
5,46,708
8,903
5,001
1,443
2,16,350
59,426
27,944
71,772
57,208
1,13,410
40,645
72,766
1,02,939
6,64,994
FY22E
1,020
3,85,431
3,86,451
-7,503
2,33,232
68,203
6,80,383
8,37,786
3,20,162
5,17,624
33,903
5,001
1,443
2,27,396
77,320
33,505
59,362
57,208
1,04,982
32,217
72,766
1,22,413
6,80,383
14 May 2021
8
 Motilal Oswal Financial Services
Jindal Steel and Power
Financials and valuations
Consolidated Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
EBITDA Margin
Net Profit Margin
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Payable (Days)
Leverage Ratio (x)
Current Ratio
Interest Coverage Ratio
Debt/Equity
FY16
(18.2)
9.0
198.4
0.0
0.0
FY17
(20.9)
15.4
328.4
0.0
0.0
FY18
(8.5)
23.3
313.9
0.0
0.0
FY19
3.3
18.4
335.0
0.0
0.0
FY20
(7.8)
36.9
315.1
0.0
0.0
FY21E
61.4
88.0
311.9
0.0
0.0
7.3
5.1
1.4
1.8
4.6
0.0
18.7
(9.1)
(8.5)
1.2
1.1
0.3
0.3
64
28
84
2.6
0.2
2.6
22.2
(9.1)
(7.9)
1.0
1.1
0.3
0.3
63
30
39
1.8
0.2
1.5
FY17
46,613
-1,020
7,190
450
15,840
69,072
-24,975
5,164
-934
754
1,511
-18,481
0
-10,256
0
-41,396
-51,651
-1,060
6,204
5,144
23.4
(3.0)
(2.6)
3.2
3.6
0.4
0.3
66
24
38
1.7
0.7
1.4
FY18
64,691
2,853
-9,267
-553
14,101
71,825
-25,767
12,299
-2,376
1,533
-533
-14,845
13,883
-24,391
15
-46,845
-57,338
-358
5,144
4,786
21.3
0.8
1.0
5.3
5.7
0.5
0.5
60
28
30
1.5
1.0
1.3
FY19
84,056
1,262
-23,983
296
22,001
83,632
-14,333
2,436
3,044
532
-533
-8,853
0
-30,260
-18
-45,699
-75,280
-502
4,786
4,284
21.2
(2.1)
(2.4)
4.8
5.1
0.5
0.5
63
35
35
1.2
0.9
1.2
FY20
78,539
1,569
-771
35
15,894
95,265
-16,646
339
-219
527
-15,999
5,129
-40,676
-18
-40,054
-74,032
5,235
4,284
9,519
38.0
16.1
19.6
16.7
17.7
0.7
0.4
56
26
38
1.9
3.7
0.7
FY21
1,47,592
-1,653
-12,434
515
-14,328
1,19,692
-8,581
213
-3,937
986
-11,319
0
-23,367
-18
-22,735
-46,120
62,254
9,519
71,772
FY22E
66.9
101.6
378.9
0.0
0.0
6.7
4.4
1.2
1.3
4.2
0.0
31.9
14.5
19.4
17.2
20.0
0.8
0.4
60
26
25
2.2
5.1
0.4
FY22E
1,50,000
-31,884
-17,576
1,00,541
-30,000
0
0
-30,000
-60,000
0
-22,950
-82,950
-12,410
71,772
59,362
FY23E
56.7
90.6
435.6
0.0
0.0
7.9
5.0
1.0
1.3
4.5
0.0
27.9
12.4
13.9
14.0
16.7
0.8
0.4
60
26
30
2.0
5.6
0.3
(INR m)
FY23E
1,30,408
7,010
-19,883
1,17,534
-53,000
0
0
-53,000
-50,000
0
-17,064
-67,064
-2,530
59,362
56,832
Consolidated Cash Flow Statement
Y/E March
FY16
EBITDA
34,410
Non-cash exp. (income)
-4,581
(Inc.)/Dec. in Wkg. Cap.
11,762
Tax Paid
-170
Others
CF from Op. Activity
41,422
(Inc.)/Dec. in FA + CWIP
-39,500
(Pur.)/Sale of Investments
15,904
Acquisition in subsidiaries
1,052
Loans and advances
-1,337
Int. and Dividend Income
2,292
Other investing activities
1,699
CF from Inv. Activity
-19,889
Equity raised/(repaid)
0
Debt raised/(repaid)
9,230
Dividend (incl. tax)
-8
Interest paid
-35,941
Other financing
0
CF from Fin. Activity
-26,719
(Inc.)/Dec. in Cash
-5,187
Add: opening Balance
11,391
Closing Balance
6,204
14 May 2021
9
 Motilal Oswal Financial Services
Jindal Steel and Power
NOTES
14 May 2021
10
 Motilal Oswal Financial Services
Jindal Steel and Power
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
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registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
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buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
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specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
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This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
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located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
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The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
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In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
14 May 2021
11
 Motilal Oswal Financial Services
Jindal Steel and Power
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on
the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL
even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
-
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
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The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
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Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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