Buy Jindal Stainless; target of Rs 829: Prabhudas Lilladher

Moneycontrol • 6 days ago

Original source

Key Investment Pillars

  • Export recovery: JDSL's exports rebounded 25% YoY to 73kt in Q2FY27, driven by demand from international markets, which is expected to continue.
  • Domestic production normalization: Production is expected to normalize following the propane shortage in Q1FY27, leading to improved domestic availability and potentially easing import pressure.
  • Downstream expansion: JDSL's downstream expansion projects, including the commissioning of cold-rolling mills and the HAPL line, are expected to support value-added product growth and drive medium-term growth.
  • Cost discipline: JDSL has maintained its focus on profitability over volumes, with revised EBITDA/t guidance of INR20-22k/t, driven by stable stainless steel pricing and improved volumes.

Thesis Validation Checklist

  • Import intensity and volume growth: Monitor import intensity and JDSL's volume growth in H2FY27 to assess the company's ability to recover from the Q1FY27 disruption.
  • Commissioning of HAPL line: Track the commissioning of the HAPL line, expected by end-CY26 or early CY27, which will support the next leg of volume growth.
  • ADD outcome: Await the decision on the ADD investigation for cold-rolled stainless steel imports from China, Indonesia, and Vietnam, expected by Dec'26, which may impact JDSL's competitiveness.