Jindal Steel & Power Q1 Review - Deleveraging To Continue: Motilal Oswal
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Motilal Oswal Report
Jindal Steel & Power Ltd.’s Q1 FY22 result was strong as expected, with the highest ever Ebitda/tonne of Rs 28,098/ tonne (7% above our estimate).
However, JSPL's standalone Ebitda fell 7% QoQ to Rs 45.3 billion due to a 16% QoQ decline in volume.
Adjusted for the Jindal Power Ltd. divestment, net debt fell only 4% QoQ to Rs 152 billion due to an increase in working capital.
We raise our FY22E Ebitda by 13% on expectations of higher steel prices in the fiscal.
Strong cash flows, coupled with cash proceeds of Rs 30.1 billion from the Jindal Power divestment, should lead to a fall in net debt to Rs 34.5 billion by FY23E, implying 0.3 times FY23E Ebitda.
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