“Jindal Steel Shares Show Signs of Overbought Conditions Near Record Highs: What’s Next?”
Shares of Jindal Steel and Power Ltd (JSPL) were trading near their record high in early deals on Tuesday.
In the current session, the stock rose marginally higher to Rs 919.95 on BSE. JSPL stock hit a record high of Rs 924 on April 8, 2024. The stock has risen 22.90 per cent since the beginning of this year and risen 67.66 per cent in one year. JSPL shares have clocked multibagger returns of 122% in the last three years.
A total of 0.28 lakh shares of the firm changed hands amounting to a turnover of Rs 2.51 crore on BSE.
The stock has a one-year beta of 0.7, indicating very low volatility during the period. However, the stock is overbought on charts with the relative strength index (RSI) of Jindal Steel at 70.1, Jindal Steel shares are trading higher than the 10 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Brokerage Anand Rathi has assigned a buy rating to the stock with a target of Rs 1,070.
“Robust demand for steel in India is expected to persist. Considering the company’s strong focus on capacity addition, raw-material integration, cost-control initiatives, increase in share of VAPs and strong control of its balance sheet, we initiate coverage on it, with a Buy rating and a target price of Rs 1,070, 6.5x FY26e EV/EBITDA. Risks to the upside are delay in capex execution and domestic slowdown,” said the brokerage.
Centrum Broking has termed Jindal Steel and Power as its top pick. It has assigned a target price of Rs 845 to the stock.
Nuvama Wealth has a buy rating on the Jindal Steel stock with a price target of Rs 1030.
“JSPL aims to complete 6.3mtpa steel expansion by end-FY25, which would lift its earnings orbit. We reckon an EBITDA CAGR of 31% over FY24-26E,” said the brokerage.
“With resumption of captive coal mines and other cost-saving/value-additive facilities, we expect JSPL to sustain EBITDA/t of INR15k-plus FY25 onwards despite no improvement in steel prices. The 19% steel volume CAGR, improvement in product mix with commissioning of HSM, and benefits of captive coal and pellets along with a slurry pipeline/conveyor belt would aid EBITDA CAGR of 31% over FY24–26E,” added the brokerage.
