Jindal Steel shares gain as Motilal Oswal sees 18% upside on strong financials

Shares of Jindal Steel & Power Ltd (JSPL) gained over 3% today after financial services firm Motilal Oswal assigned a target of Rs 900 to the metal stock. The fresh target amounts to an upside of 18% compared to the previous close. Jindal Steel stock rose up to 3.26% to Rs 784.80 against the previous close of Rs 759.95 on BSE. Market cap of Jindal Steel climbed to Rs 78,715 crore.

JSPL stock has gained 3.90 per cent since the beginning of this year and risen 31 per cent in one year. JSPL shares have clocked multibagger returns of 140.39% in the last three years.

A total of 0.91 lakh shares of the firm changed hands amounting to a turnover of Rs 7.07 crore on BSE.

Motilal Oswal is of the view that JSPL has one of the strongest balance sheets among the domestic manufacturers. It has maintained its BUY stance on the stock.

"The planned capital expenditure will result in volume growth and a reduction in structural costs. With net debt of Rs 9,100 crore in 9MFY24 and a net debt-to-EBITDA ratio at a comfortable level of 0.9 times, JSPL has one of the strongest balance sheets among the domestic manufacturers. The stock trades at 5.2x FY26E EV/EBITDA and 1.3x FY26E P/B. We reiterate BUY on the stock with a target of Rs 900 (6x FY26E EV/EBITDA)," said the brokerage.

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The stock has a one-year beta of 0.3, indicating very low volatility during the period.

In terms of technicals, the relative strength index (RSI) of Jindal Steel stands at 53.9, 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.

The metal and power major reported 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 the October-December quarter 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.