Prabhudas Lilladher Maintains Buy on Jindal Stainless, Sets Target Price of Rs 821
Jindal Stainless Delivers Strong Operating Performance in Q4FY26
Jindal Stainless (JDSL) has reported a strong operating performance in the fourth quarter of FY26, despite facing challenges in terms of flattish volumes. The company's domestic volumes saw marginal growth, supported by steady demand across various sectors such as autos, pipes & tubes, railways, and infrastructure. In contrast, export volumes declined by 12.6% year-over-year to approximately 45kt, due to global trade disruptions and tariff uncertainties. However, export volumes are improving gradually, driven by the company's focus on growing regions.
The average net sales realisation (NSR) increased by 3.1% quarter-over-quarter, led by higher stainless steel (SS) prices during the quarter. On the cost front, lower raw material costs supported margins, partially offset by higher other expenses. Consequently, the company's consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) per tonne stood at INR22,670, reflecting strong cost control.
Key Performance Indicators
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| Quarter | Domestic Volumes (kt) | Export Volumes (kt) | Average NSR% | Consolidated EBITDA/tonne (Rs) |
|---|---|---|---|---|
| Q4FY26 | 642 | 45 | 3.1% | 22,670 |
| Q4FY25 | N/A | N/A | N/A | N/A |
Looking ahead, the management has indicated that the availability of liquefied petroleum gas (LPG) has improved from May, and the transition to liquefied natural gas (LNG) has aided the company. Despite a volatile cost environment, the management is guiding for an EBITDA of INR18-20k/tonne for the first half of FY27, with a review post the first half.
Outlook and Recommendation
We have marginally cut our FY27/28E EBITDA estimates by 1.6%/1.4% and expect JDSL to deliver a 13% EBITDA compound annual growth rate (CAGR) over FY26-28E. At the current market price, the stock is trading at 10.4x/8.5x enterprise value (EV) of FY27/FY28E EBITDA. Based on this analysis, we maintain a 'Accumulate' rating with a target price of Rs821 (earlier Rs826), valuing the company at 9x EV of March 28E EBITDA.
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Investor Takeaway
Maintain Buy on Jindal Stainless with a target price of Rs 821.
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