JSPL Q2 Review- Weak Volumes, Lower Realization Drag Performance; Earnings Set To Improve In H2: Motilal Oswal

Motilal Oswal Report

While Jindal Steel and Power Ltd.'s Q2 FY25 Ebitda was weak primarily due to muted price and lower volume, the H2 FY25 outlook remains bright. We expect JSPL to report revenue/Ebitda growth of +24/26% YoY for H2 FY25, owing to improving prices and demand coupled with muted cost.

We cut our revenue/Ebitda and adjusted profit after tax estimate by 7/4/5% for FY25 over weak performance in h1 FY25. We have retained our estimates for FY26 and FY27.

The ongoing capex would lead to more value-added products, which would yield better profitability and margins in the longer term.

We reiterate our Buy rating with a target price of Rs 1200, based on 6.5 times on EV/Ebitda on Sep’26 estimate. The stock is currently trading at 4.9x on EV/Ebitda and 1.4x on P/B FY27 estimate.

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