I-Sec maintains Buy on Jindal Stainless, lowers target price to Rs 760

ICICI Securities has maintained a buy call on Jindal Stainless with a revised target price of Rs 760 (earlier Rs 850). The current market price of Jindal Stainless is Rs 595.9. Jindal Stainless, incorporated in 1980, is a Small Cap company with a market cap of Rs 48828.94 crore, operating in Metals - Ferrous sector.

Jindal Stainless' key products/revenue segments include Steel, Sale of services, Export Incentives, Other Operating Revenue and Job Work for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 10006.41 crore, up 1.86% from last quarter Total Income of Rs 9823.88 crore and up 9.16% from last year same quarter Total Income of Rs 9166.42 crore. The company has reported net profit after tax of Rs 668.78 crore in the latest quarter.

The company?s top management includes Mrs.Savitri Devi Jindal, Mrs.Shruti Shrivastava, Mr.Ajay Mankotia, Dr.Aarti Gupta, Dr.Rajeev Uberoi, Mr.Jayaram Easwaran, Mr.Praveen Kumar Malhotra, Mr.Anurag Mantri, Mr.Jagmohan Sood, Mr.Tarun Kumar Khulbe, Mr.Abhyuday Jindal, Mr.Ratan Jindal, Mrs.Arti Luniya. Company has Walker Chandiok & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 82 Crore shares outstanding.

Investment Rationale
Rather than looking at standalone EBITDA/te, ICICI Securities believes it is ideal to take cognizance of consolidated EBITDA/te, as the pace of ramp-up of downstream capacities and newly acquired subsidiaries are likely to lead to a change in product mix. They have lowered the FY26E/FY27E EBITDA by 12%/11%, taking cognizance of a gradual ramp up in volumes and improvement in profitability at the newly acquired subsidiaries. In FY27E, I-Sec expects consolidated EBITDA/te of Rs 19,400 (earlier Rs 22,000) as they expect a slight delay in commissioning of downstream (rolling) capacity at JSL?s Jajpur plant. Their revised FY26/FY27 EBITDA estimate is 13%/20% lower vs. consensus.

Jindal Stainless is currently trading at P/E (2-year forward) of 10.9x, almost 24% lower than its highest level in the past five years. This is on the back of RoE (2-year forward) estimate coming off 17%. In the case of Outokumpu, P/E (2-year forward) is 20% higher compared to its past fiveyear mean level; however, RoE (2-year forward) is down 23% compared to its mean level of past five years. Similarly in case of Aperam, P/E (2-year forward) is 9% higher compared to its mean level of past five years; however, RoE (2-year forward) is down 6% vs. its mean level of past five years.

Promoter/FII Holdings
Promoters held 60.71 per cent stake in the company as of 31-Dec-2024, while FIIs owned 22.16 per cent, DIIs 6.26 per cent.