JSPL stock to outperform peers amid falling debt and rising steel demand
Steel prices in India have risen rapidly and are trade nearly 50% higher year-on-year at Rs 58,000-Rs 60,000 per tonne or $800 per tonne while global prices are above $1,000 per tonne.
Synopsis
The sale of Oman assets is likely to reduce the debt by Rs 5,400 crore. This together with strong internal accruals owing to higher steel prices and sales volume may result in Rs 22,000 crore of debt for FY21 compared with Rs 35,900 crore in the previous fiscal year.
ET Intelligence Group: The stock of Jindal Steel and Power (JSPL) has outperformed peers including Tata Steel and SAIL over the past month following a sustained trend in global steel demand. This is expected to continue given the completion of the sale of its steel assets in Oman, is expected to strengthen its balance sheet further by reducing debt and improving cash flow.
The sale of Oman assets is likely to reduce the debt by Rs 5,400 crore.
