Jindal Steel (JINDALST IN) – Q3FY26 Result Update – Weak Q3; higher steel prices to support – Accumulate
Published on 01 Feb 2026
BOF3, CGL lines and slurry pipeline are on track to be commissioned by Q4 end. With faster ramping up of 4.6mtpa BF2 and both BOFs, Angul is on track to deliver strong volume growth over the next few quarters. HRC and rebar prices in Q4TDFY26 are up 10% and 14%, respectively, compared to average Q3 levels. We expect steel prices to remain stable, with incremental share of flats driving earnings in the medium term. Key things to watch out are: 1) steel spreads, given input costs are also on the rise; 2) commissioning of the slurry pipeline and Utkal B2 coal, leading to cost savings; and 3) improvement of product mix in flats. We have cut FY27/28E EBITDA estimates by 12%/6%, assuming lower margins in flats in the initial quarters during the ramp-up and gradual improvement as cost efficiency projects yield results. We expect EBITDA CAGR of 23% over FY25-28E. At CMP, the stock is trading at 9.2x/6.5x EV of FY27/28E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs1,171 (earlier Rs1,100) as we roll forward and value it at same 7x EV of Mar’28E EBITDA.
