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Centrum Broking Report
Jindal Stainless Ltd. reported in-line consolidated Ebitda of Rs 11.8 billion (our estimate: Rs 12 billion) down 2% QoQ as well as Ebitda/tonne in-line with our estimate at Rs 21,014 (our estimate: Rs 21,362/tonne) remain flattish QoQ. The decline in Ebitda was largely due to increase in prices partially offset by decline volume.
The sales volume decline by 2.3% QoQ led by weak domestic demand recovery in export market but realisation/tonne increase by 6% QoQ due to increase in prices. Standalone Ebitda/tonne reported at Rs 17,833/tonne (our estimate: Rs 17,799/t), remain flattish QoQ. The consolidated net debt decrease by Rs 5.28 billion (11% QoQ) to Rs 44.2 billion.
Due to muted export demand, we revise FY25E volume growth to 10% from earlier 20% and resulting in 20% decline our Ebitda estimate. However, we introduce FY27E and remain positive outlook for long term SS demand. Hence, we estimate Jindal Stainless profitability to improve with revenue/Ebitda/PAT growing at 20%/21%/29% CAGR over FY24-27E.
Further, strong RoE of 23% and net debt/Ebitda ratio of 0.2x by FY27 if no further capex is announced. The strong earnings growth and promising outlook with forward integration and raw material security, we recommend Buy rating and increase our target price to Rs 841 (Earlier: Rs 816/share), valuing at nine times H1 FY27E enterprise value/Ebitda.
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