MOSL: JINDAL STEEL AND POWER (Buy)-Lower volumes for Indian steel business drives miss
JINDAL STEEL AND POWER: Lower volumes for Indian steel business drives miss; Steel business ramping up
(JSP IN, Mkt Cap USD1.9b, CMP INR135, TP INR170, 26% Upside, Buy)
2QFY20 consolidated EBITDA at INR16.4b (-24% QoQ) came in 5% below our estimate on lower volumes in the standalone business. Interest cost declined 7% QoQ to INR10.3b. Cash profit (pre-tax and MI) decreased 43% QoQ to INR6.1b. PAT loss stood at INR3b (vs. our est.: INR4.7b). Net debt (excl. acceptances) reduced ~INR11b to INR365b QoQ.
- Standalone: Steel sales were down 7% QoQ (+4% YoY) to 1.33mt. NSR declined just ~INR1,000/t QoQ (v/s est. INR3,800/t decline). However, EBITDA/t declined ~INR1,800/t to INR9,437/t.
- Jindal Power: EBITDA declined 15% QoQ to INR9.5b on the back of lower generation. PLF declined to 31% in 2QFY20 (v/s ~40% in 1QFY20).
Jindal Steel & Power is engaged in the manufacture of rails, parallel flange beams and columns, plates and coils, angles and columns, rebars, wire rods, fabricated secions, speedfloor, semi-finished products, power, minerals and sponge iron.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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