JSPL Q4 Review - Deleveraging To Continue On Strong Earnings: Motilal Oswal
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Motilal Oswal Report
Jindal Steel and Power Ltd. achieved its highest ever steel Ebitda/profit after tax of Rs 48.8 billion/Rs 27.7 billion in Q4 FY21, supported by a strong pricing environment.
Consolidated net debt fell further by Rs 34.7 billion QoQ to Rs 224 billion, implying a net debt/Ebitda of 1.53 times.
It has announced an Rs 180 billion capex at Angul to expand its steel capacity by 85% to 15.9 million tonne per annum by FY25, at a very competitive cost of ~$390/tonne.
With the proposed sale of Jindal Power Ltd., the company would become a pure play Indian steel company, which should also aid in better value discovery as the steel business is still under-valued at 4.1 times FY23E enterprise value/Ebitda.
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