PL First Cut – Jindal Steel and Power announces commissioning of 5.5mtpa HSM at Angul

*PL First Cut – Tushar Chaudhari – Research Analyst, Prabhudas Lilladher Pvt Ltd*

Jindal Steel and Power (JSP In, CMP Rs720, MCap Rs 743bn, BUY) announces commissioning of 5.5mtpa HSM at Angul; CFO resigns

☘️ JSP announced the commissioning of 5.5mtpa Hot Strip Mill (HSM) at Angul which is expected to increase the proportion of Flat products to 55-60% from c.33% and reduce semis as well; aiding product mix and margin improvement over next two years.

☘️ The facility is capable of producing 1mm thick and 1680mm wide coils and is equipped with advanced features like Transfer bar cooling, edge heater, coil box, and heat shields, ensuring top-notch flatness, uniform mechanical properties, and production of high value-added grades.

☘️ This positions JSP to cater to various sectors including auto, construction, oil, downstream cold rolling, galvanizing, colour coating, etc. It was built in record 29 months.

☘️ In another development, its CFO, Mr. Ramkumar Ramaswamy, has resigned today for personal reasons after 2 years of service. Mr. Sunil Agrawal, with 31 years of experience, will assume the CFO responsibilities temporarily.

☘️ View: Ramping up of HSM, commissioning of furnaces, opening of rest coal blocks, completing slurry pipeline are few of the triggers for JSP going ahead; which would drive earnings. The stock is currently trading at 6.7x/ 5.6x EV of FY25E/ FY26E EBITDA. Maintain BUY rating on the stock with a TP of Rs 826 assigning an EV of 6x FY26E EBITDA.