Motilal Oswal is bullish on JSW Steel has recommended buy rating on the stock with a target price of Rs 322 in its research report dated February 06, 2019.
Motilal Oswal's research report on JSW Steel
JSW Steel's (JSTL) 3QFY19 consol. EBITDA of INR45.1b (-8% QoQ) was 2% ahead of our estimate, led by higher-than-expected steel realizations, partly offset by losses at its recently acquired subsidiaries. Standalone (S/A) EBITDA per ton of INR12,060 came in 6% higher than our estimate, given higher spreads and a favorable sales mix (export mix of 10% v/s 30% in 3QFY18). However, consol. PAT of INR16.2b (-23% QoQ) came in 6% below our estimate due to higher interest & depreciation expenses.
Outlook
We cut our EBITDA estimate by 5% to factor in the slower-than-expected turnaround at the recent acquisitions. We value the stock at 7x EV/EBITDA and book value for CWIP at INR321/share (earlier: INR348). Maintain Buy.
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