Shares of Jindal Steel & Power fall 3% as Q4 profit slumps 79%

Morgan Stanley has an ‘underweight’ rating on the stock with a target price of Rs 460. Meanwhile, Macquarie gave a ‘neutral’ rating to the shares of Jindal Steel & Power with a target price of Rs 557

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Shares of Jindal Steel & Power fell more than 3 percent on May 17 reacting to poor March quarter earnings for FY23. The steel maker posted 79 percent slump in its consolidated net profit to Rs 465.66 crore for Q4 due to higher expenses. Revenue was down 4.5 percent year-on-year (YoY) to Rs 13,691.93 crore.

Operating margin of the company also contracted to 15.97 percent in the quarter under review from 21.41 percent a year ago.

At 10:01 am, the company’s scrip was quoting at Rs 546.15, down Rs 14.20, or 2.5 percent.

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According to Morgan Stanley, operational expenditure led to a big miss on the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) front. EBITDA fell 29 percent YoY to Rs 2,187.28 crore. The brokerage firm said that much lower EBITDA due to higher operational expenditure, was partially offset by better realisations.

Morgan Stanley has an ‘underweight’ rating on the stock with a target price of Rs 460. Meanwhile, Macquarie has a ‘neutral’ rating on shares of Jindal Steel & Power with a target price of Rs 557.

Besides, JSPL said it has reduced its net debt by Rs 1,923 crore during FY23, and its consolidated net debt as of March 31, 2023, stood at Rs 6,953 crore.

However, Nuvama Institutional Equities expects weakness in short-term earnings amid lower volumes and prices, partially offset by softening raw material costs. Though commissioning of its plants is seeing a slight delay, but a majority is expected to be commissioned within FY24, it pointed out and retained its ‘buy’ rating on the stock with a higher target price of Rs 737 as compared with Rs 688 earlier.

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