Buy JSW Steel, target price Rs 413: Motilal Oswal

Motilal Oswal has given a buy rating to JSW Steel with a target price of Rs 413. The share price moved down by 0.17 per cent from its previous close of Rs 359.10. The stock’s last traded price is Rs 358.50.

JSW Steel Ltd., incorporated in the year 1994, is a Large Cap company (having a market cap of Rs 86826.56 Crore) operating in Metals - Ferrous sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 18662.00 Crore, up 62.93 % from last quarter Sales of Rs 11454.00 Crore and up 8.48 % from last year same quarter Sales of Rs 17203.00 Crore Company reported net profit after tax of Rs 1548.00 Crore in latest quarter.

Investment Rationale
The brokerage like JSW Steel given its strong project pipeline and cost reduction initiatives. On the domestic front, it expects the company to deliver above-industry volume growth in FY22E driven by expansion. Margin should improve, aided by a better product mix. It expects JSTL’s margin to remain strong on the back of higher steel prices and the commissioning of cost-saving projects. Higher margin should also keep debt in check. It expects net debt to decline by INR49b to INR590b over FY20-22E. It expects it to decline subsequently as the capex phase ends and invested projects start generating cash flows.

Promoter/FII Holdings
Promoters held 60.48 per cent stake in the company as of March 31, 2020, while FIIs held 13.40 per cent, DIIs 12.35 per cent and public and others 13.77 per cent.