Jindal Steel and Power’s share price dropped 13% in Friday’s early trade after announcing the company’s Q3 results after hours on Thursday.
Jindal Steel and Power Q3 Results:
In Friday morning trading, Jindal Steel and Power’s share price dropped more than 13% after the company’s Q3 data were released after market hours on Thursday.
The price of Jindal Steel and Power’s shares began Friday at ₹799.85 on the BSE, over 5% less than its closing price of ₹840.10. The share price of Jindal Steel and Power fell more than 13% to intraday lows of ₹724.35.
Compared to the ₹1,927.99 crores in the year-ago quarter, Jindal Steel and Power’s net profit for the quarter ending December 2024 was more than half at ₹950.88.
Jindal Steel and Power’s volume increase stayed modest. The 1.90 million tonnes (MT) of steel sold in Q3FY25 represented a 5% increase over the 1.81 MT sold in the same period last year. The country’s steel prices have also not been very encouraging for steel makers. Therefore, Jindal Steel and Powe’s operating revenues in the third quarter were unchanged at ₹11,750.67 crore, down from ₹11,701.32 in the same quarter last year.
According to Motilal Oswal Financial Services, lower volumes negatively impacted Jindal Steel’s and Power’s Q3 results. The steel sales volume at 1.9 metric tons (up 5% year over year and 3% sequentially) fell short of their projections of 2.18 metric tons. MOFSL stated that the earnings could increase going forward, helped by volume ramp-up and cost savings, even if Jindal Steel and Power Ltd’s Q3 performance fell short of their projections because of poor volumes and muted realizations.
MOFSL has reduced its Earnings before Interest Tax Depreciation and Amortization (EBITDA) estimates by 6%, 17%, and 10% for FY25, FY26, and FY27 to account for a lower-than-expected volume growth expectation. They also need further information on the new capital expenditure plans to determine the precise effects on earnings. With a revised target price of ₹960, MOFSL has kept its purchase rating.
According to Antique Stock Broking, Angul’s phase I expansion’s improved product mix will boost profitability and growth. Antique added that in light of phase I’s commissioning delays, phase II expansion’s specifics and implementation, which would cost ₹15,000 crore, would need to be closely watched. A strong balance sheet might support phase II expansion.
Lower volumes, poorer realization, and more significant expenses were considered, resulting in a 26%, 26%, and 19% decrease in EBITDA in FY25, FY26, and FY27, respectively. Antique’s updated Target Price of ₹996 (formerly ₹1,183) keeps it at a purchase grade.
