Reduce Jindal Steel & Power, target price Rs 279: ICICI Securities

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Reduce Jindal Steel & Power, target price Rs 279:  ICICI Securities


ICICI Securities has reduce call on Jindal Steel & Power with a target price of Rs 279. The current market price of Jindal Steel & Power Ltd. is Rs 288.5.

Jindal Steel & Power Ltd., incorporated in the year 1979, is a Mid Cap company (having a market cap of Rs 31232.89 Crore) operating in Metals – Ferrous sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 10533.51 Crore, up 17.17 % from last quarter Sales of Rs 8989.79 Crore and up 13.27 % from last year same quarter Sales of Rs 9299.78 Crore Company reported net profit after tax of Rs 2566.68 Crore in latest quarter.

Investment Rationale
After clocking negative RoE for the past 5 years, the strength of the cycle places JSPL in good stead to report ~ 19% RoE for FY21/22E. FCF generated can lead to Net debt reduce to Rs 90-100bn by FY23E end. The cyclically (all-time) high EBITDA/te, and the shortening cycle duration dictates REDUCE rating.


Promoter/FII Holdings
Promoters held 60.5 per cent stake in the company as of Dec 30, 2020, while FIIs held 11.7 per cent, DIIs 14.8 per cent and public and others 13 per cent.





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