Jindal Steel & Power shares hit record high as Nuvama sees 24% upside

Shares of Jindal Steel & Power Ltd (JSPL) hit their all-time high today after brokerage Nuvama assigned a 24% upside to the firm. Jindal Steel shares are projected to hit the Rs 1,030 mark in a year compared to the previous close of Rs 832.65 on BSE.

In the current session, the stock rose 4.12% to a record high of Rs 867 on BSE. JSPL stock has gained 13.15 per cent since the beginning of this year and risen 57 per cent in one year. JSPL shares have clocked multibagger returns of 159.09% in the last three years.

A total of 1.08 lakh shares of the firm changed hands amounting to a turnover of Rs 9.15 crore on BSE.

The stock has a one-year beta of 0.7, indicating very low volatility during the period.

In terms of technicals, the relative strength index (RSI) of Jindal Steel stands at 58.6, signaling the stock is neither oversold nor overbought. Jindal Steel stock is trading higher than the 10 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

“JSPL aims to complete 6.3mtpa steel expansion by end-FY25, which would lift its earnings orbit. We reckon an EBITDA CAGR of 31% over FY24–26E; ‘BUY’ with a target price of Rs 1,030 (6x FY26E EV/EBITDA),” said Nuvama.

“With resumption of captive coal mines and other cost-saving/value-additive facilities, we expect JSPL to sustain EBITDA/t of INR15k-plus FY25 onwards despite no improvement in steel prices. The 19% steel volume CAGR, improvement in product mix with commissioning of HSM, and benefits of captive coal and pellets along with a slurry pipeline/conveyor belt would aid EBITDA CAGR of 31% over FY24–26E,” added the brokerage.

The metal and power major posted a 272 percent rise in consolidated net profit for the quarter ended December 2023. Profit rose to Rs 1,928 crore compared to a consolidated net profit of Rs 518 crore in Q3FY23.

Consolidated net revenue in Q3 fell 5.9 percent to Rs 11,736 crore amid lower volumes. On a sequential basis, revenue fell 4 percent while net profit jumped 38.7 percent.