Jindal Stainless (JDSL IN) – Q2FY26 Result Update – Strong volumes; near term uncertainties persist – HOLD

Jindal Stainless (JDSL) reported tad better standalone operating performance in Q2FY26 supported by strong domestic volume growth (+16% YoY). Overall volumes grew 14.8% YoY to 648kt aided by domestic volumes of 590kt on robust demand from key sectors such as railways/ metro, white goods, lifts & elevators and autos supported by festive season uplift. Exports volumes inched up ~3% YoY to 58kt, due to uncertainty in global markets for the last few months due to geopolitics and policy changes leading to confusion in the market. Average realisation improved 1.7% QoQ on marginal uptick in Stainless steel (SS) prices. Mgmt. reiterated its volume and EBITDA/t guidance focusing on value-added products having high end applications and rising contribution from cold rolled products. We expect JDSL to deliver double digit volume CAGR over FY25-28E led by ramp up of Chromeni in H2FY26 and upcoming 1.2mtpa SSMS in Indonesia (which would increase its capacity to 4.2mtpa by end FY27). Things to watch out for: a) GoI action to restrict cheaper SS imports, b) Chromeni ramp up, c) clarity over CBAM regulations and US tariffs for exports d) SS and nickel pricing spreads. We cut our volume assumptions by 1% and factor in flattish SS pricing. We expect JDSL to deliver 15% CAGR over FY25-28E as it has adequate capacities. We expect revenue/EBITDA/PAT CAGR of 13%/15%/25% over FY25-28E. At CMP, stock is trading at 9.9x/8.1x EV of FY27/FY28E EBITDA. Maintain ‘Hold’ rating with TP of Rs748 (earlier Rs759) valuing at 9x EV of Sep’27E EBITDA.