Steel stock crashes over 5% after brokerages cuts its target price by 13%

During Monday’s trading session, the shares of India’s leading stainless-steel manufacturer slumped 5.2 percent on BSE, after multiple brokerage firms cut the stock’s price target, citing demand concerns.

Price Movement

With a market capitalisation of Rs. 48,894.8 crores, at 03:01 p.m., the shares of Jindal Stainless Limited were trading in the red at Rs. 593.55, down by around 5.2 percent, as against its previous closing price of Rs. 625.65. The stock has delivered negative returns of nearly 16 percent over a one-year period, as well as around 3 percent returns in the last one month.

What’s the News

Multiple brokerages have cut their price targets for the stock, citing concerns over demand, and expect the stock to face pressure due to near-term earnings weakness. Nuvama Institutional Equities has cut its target price by nearly 13 percent for Jindal Stainless Limited (JSL) to Rs. 723, down from Rs. 836, following a meeting with the company’s management.

Additionally, on March 21st, Anurag Mantri announced his resignation from the role of Executive Director and Group CFO. According to a regulatory filing by JSL, he will officially step down from both positions at the close of business on 4th April 2025. Mantri has resigned to explore new professional opportunities, the company stated.

Brokerages Target

The brokerage firm Nuvama Institutional Equities has cut its target price from Rs. 836 to Rs. 723 per share on JSL, representing a potential upside of nearly 21 percent from its current price levels of Rs. 595.5. Additionally, Investec has also reiterated a “buy” target on the stock but cuts the target price to Rs. 815 from Rs. 870, indicating a potential upside of nearly 37 percent from current price levels.

Also read: Stock under ₹100 jumps 5% after receiving ₹12 Cr order from Ahmedabad Municipal Corp

Brokerages Outlook

Nuvama Institutional Equities said that it expects the stock to remain under pressure due to near-term earnings weakness, but maintained its ‘Buy’ rating, citing that the long-term growth is intact.

According to Nuvama, the company has faced challenges due to weak export demand and high imports. This has led the management to provide a cautious forecast, projecting a 9–10 percent year-on-year volume growth for FY26 (assuming no export growth) and a consolidated EBITDA per tonne (EBITDA/t) of Rs. 19,000–21,000/t, which is higher than the Q4FY25 levels. The implied Q4FY25 EBITDA/t guidance is Rs. 16,000.

Due to weak exports and strong imports, Jindal Stainless has had to shift volumes to lower-margin segments, which has negatively impacted its margins, according to the brokerage.

The brokerage further noted that the company has delayed the start of its downstream operations at Jajpur by 8–9 months due to demand uncertainty. Initially expected to begin in the first half of FY27, this delay suggests potential operational challenges ahead.

As a result, Nuvama has revised its EBITDA projections downward for FY25, FY26, and FY27 by 5 percent, 10 percent, and 13 percent, respectively, to account for lower volumes and profitability.

In addition, Investec has reiterated its “Buy” rating, but lowered its target price from Rs. 870 to Rs. 815, citing a weak demand environment that could affect volumes and delay downstream projects. The firm has also reduced its operating profit estimates by 7–9 percent for FY25-27.

Financials

Jindal Stainless experienced significant growth in its revenue from operations, showing a year-on-year rise of around 8.5 percent from Rs. 9,127 crores in Q3 FY24 to Rs. 9,907 crores in Q3 FY25. However, its net profit decreased during the same period from Rs. 691 crores to Rs. 654 crores, indicating a decline of around 5.3 percent YoY.

About the Company

Jindal Stainless Limited is engaged in the business of manufacturing of stainless-steel flat products in austenitic, ferritic, martensitic and duplex grades. The product range includes ferro alloys, stainless steel slabs and blooms, hot rolled coils, plates and sheets, cold rolled coils and sheets, specialty products such as razor blade steel, precision strips and long products.

Written by Shivani Singh

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Steel stock crashes over 5% after brokerages cuts its target price by 13% appeared first on Trade Brains.