Jindal Steel Soars: Emkay Global Starts With Buy, ₹1400 Target After Strong Q4

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AuthorVihaan Mehta|Published at:
Jindal Steel Soars: Emkay Global Starts With Buy, ₹1400 Target After Strong Q4
Overview

Emkay Global Financial initiated a 'Buy' rating for Jindal Steel and Power (JINDALST), setting a price target of ₹1,400. The brokerage pointed to strong Q4 performance, with adjusted EBITDA surpassing estimates due to higher FX gains and improved net sales realization (NSR). Despite an impairment charge on Australian assets impacting profit, Emkay expects the company's shift to value-added products and cost-saving initiatives to drive future EBITDA growth.

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Q4 Performance Highlights

Jindal Steel and Power (JINDALST) reported a strong fourth quarter, exceeding analyst expectations. Adjusted EBITDA reached ₹26.5 billion, boosted by higher foreign exchange gains and improved Net Sales Realization (NSR). These gains were partly offset by start-up costs and higher coking coal expenses. EBITDA per tonne significantly improved to ₹10,103.

Operational volumes were solid, with production at 2.7 million tonnes and sales at 2.6 million tonnes. However, a substantial one-off impairment charge of ₹8.3 billion on its Australian assets significantly impacted reported Profit After Tax (PAT).

Strategic Outlook and Cost Savings

The company is shifting its product mix. Jindal Steel plans to move from a 51:49 ratio of long to flat products in FY26 to a 30:70 ratio by FY28. This change aims to boost value-added volumes, supporting higher selling prices and realizations.

Operational efficiencies are also expected from a new slurry pipeline, projected to save ₹750-1,000 per tonne. Based on these initiatives and market outlook, Emkay Global Financial forecasts EBITDA per tonne to reach ₹14,500 by FY28.

Emkay Global Financial initiated coverage with a 'Buy' recommendation and a ₹1,400 price target. The brokerage views Jindal Steel's strategic adjustments and strong operational performance as forming a solid foundation for future growth.

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Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.