Jindal Steel shares gain as analyst raises target on recovery in long steel prices

Shares of Jindal Steel gained on Friday, August 28, after brokerage firm Kotak Institutional Equities has raised its target price on the stock.

The brokerage has a "buy" rating on the Jindal Steel stock and raised its target price by over 5% to ₹1,350 per share from its previous ₹1,280 apiece. This indicates an upside of 15.4% from its previous close.

It said the company is best-placed to benefit from the ongoing recovery in long steel prices. Long products account for 50% of the volume mix, the highest among its peers, it said.

Long steel prices have risen 12% in the past month.

The brokerage said the company is transitioning from a build phase to a harvest phase and key expansion projects are nearing completion.

It said volume ramp up and cost reduction are likely to drive strong earnings growth for Jindal Steel.

The brokerage added that it expects industry-leading 17% volume compound annual growth rate (CAGR) and 31% earnings before interest tax depreciation and amortization (EBITDA) compound annual growth rate (CAGR) over FY26-29.

Jindal Steel reported its first quarter earnings last month. Its consolidated net profit declined 43.6% to ₹844 crore from ₹1,496 crore last year. Its revenue increased 25.9% to ₹15,482 crore from ₹12,294 crore in the previous fiscal.

The company's EBITDA declined 11.5% to ₹2,660.4 crore from ₹3,004 crore in the first quarter last year. Its EBITDA margin contracted to 17.18% from 24.43% in the year-ago period.

Of the 34 analysts who have coverage on Jindal Steel, 26 have a "buy" rating, and four each have "hold" and "sell" recommendations.

Shares of Jindal Steel were trading 1.5% up at ₹1,187.5 apiece at 9.25 am on Friday. The stock has gained 12.6% in the past month and is up 11.2% this year, so far.

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