Revenue in line; lower input cost leads to beat on operational profitability

Company
11 Mar 2024
5 Min read 
  • Jindal Steel & Power (JSP) reported 3QFY24 results in line with expectations.
  •  Revenue for the quarter was down 6% YoY, but operational profitability beat expectations due to lower input costs.
  •  EBITDA was up 20% YoY, driven by better-than-estimated NSR and lower input costs.
  •  APAT improved 115% YoY, driven by improved operational performance and lower finance costs.
  •  JSP has commissioned a 6mt HSM and achieved production from captive coal mines, which is expected to drive performance.
  •  Capex for the next three years is expected to be in the range of INR75-100b every year.
  •  The ongoing capacity expansion and focus on value-added products are expected to support margins.
  •  Steel demand in India is expected to remain robust, driven by infrastructure projects and higher demand for automobiles and consumer goods.
  •  The stock is currently trading at attractive valuations with a P/E of 12.7x and P/BV of 1.7x.
  •  Motilal Oswal maintains a Buy rating on JSP with a target price of INR900.
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