Jindal Steel & Power Q3 Review-Profitability Ahead Of Expectations; Maintain 'Hold' Rating: IDBI Capital

IDBI Capital Report

Jindal Steel & Power Ltd's Q3 FY24 operating profit was ahead of our forecast. Its sales volumes decreased by 10% QoQ to 1.81 million tonnes due to lower exports.

The export contributed only 3% to total volumes in Q3 FY24 versus 14% in Q2 FY24. Nevertheless, Ebitda increased by 24% QoQ to Rs 28.4 billion even as value added products contributed 65% to sales (62% in Q3 FY23).

J aims to double its capacity at Angul by FY25. We broadly maintain our FY24-25 estimates and introduce FY26 estimates in this report.

Our revised SOTP-based target price (based on FY26 estimates) stands at Rs 742 (earlier Rs 664). Given the rising exports from China to rest of the world, we maintain our cautious stance on the steel sector.

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