MOSL: JINDAL STEEL AND POWER (Buy)-Steel business driving strong operating performance
Jindal Steel and Power: Steel business driving strong operating performance; PLF improved at JPL; Re-iterating Buy
(JSP IN, Mkt Cap USD3.1b, CMP INR217, TP INR327, 51% Upside, Buy)
- 1QFY19 consol. EBITDA increased 7% QoQ (+68% YoY) to INR22.8b (4% beat), led by higher steel margins in India. Adj. PAT increased 40% QoQ to INR1.8b (est. of a loss of INR0.1b). Interest cost declined 9% QoQ to INR9.7b, while depreciation increased 8% QoQ to INR10.4b.
- Standalone – margins improved further: Steel sales were flat QoQ (+47% YoY) at 1.19mt. Pellet sales increased 12% QoQ (+36% YoY) to 830kt. EBITDA per ton increased 7% QoQ to INR13,824, largely driven by higher spreads. EBITDA increased 8% QoQ (119% YoY) to INR16.4b (est. of INR15b).
- Oman – margins strong at USD148/t: Steel sales declined 4% QoQ (+35% YoY) to 460kt. EBITDA per ton was flat QoQ (+57% YoY) at USD148/t. EBITDA declined 4% QoQ to INR4.5b.
- Jindal Power – PLF improved: PLF increased ~6pp QoQ to 37% on account of improved coal availability. Realization declined ~23% QoQ to INR3.43/kWh, but EBITDA/kWh was down just ~1% QoQ to INR1.2/kWh. EBITDA increased 18% QoQ to INR3.1b (in-line), led by higher generation.
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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