Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Jindal Stainless (NSE:JIST) (JDSL:IN) received a positive outlook from Jefferies, as the firm began covering the stock with a Buy rating and set a price target of INR800.00. The research firm highlighted Jindal Stainless’s leading position in the rapidly expanding Indian stainless steel market, noting its lower EBITDA per ton volatility and a stronger balance sheet compared to its peers in the Indian carbon steel sector.
Jefferies pointed out that the conversion spread for stainless steel in China is currently at a decade low. An increase in this spread could potentially enhance Jindal Stainless’s profit margins. The firm anticipates that Jindal Stainless will achieve a 10% volume compound annual growth rate (CAGR) and a 21% earnings per share (EPS) CAGR, with a return on equity (ROE) of 17% over the forecast period of FY25-27E.
The valuation of Jindal Stainless was described as reasonable by Jefferies, with an 11 times FY26E enterprise value to EBITDA (EV/EBITDA) ratio. This valuation takes into account the approximately 25% premium that stainless steel commands over carbon steel on a global scale.
The endorsement from Jefferies comes as Jindal Stainless continues to navigate the competitive steel industry in India, where the company has established itself as a significant player. The firm’s analysis suggests confidence in Jindal Stainless’s ability to capitalize on market conditions and maintain a robust financial performance in the coming years.
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