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Buy JSW Steel; target of Rs 360: Prabhudas Lilladher

February 12
14:25 2019

Prabhudas Lilladher’s research report on JSW Steel

JSW Steel (JSTL) reported Q3FY19 earnings in line with our expectations. Due to tepid exports (down 70% YoY), overall sales volume fell 7.3% YoY/7.1% QoQ to 3.68mn (PLe:3.95mn) tonnes (t). Share of exports fell to 10% against 30%/17% in Q3FY18/Q2FY19. However, weaker than expected volumes were offset by better than expected realisations and lower costs.

Outlook

However, aggressive acquisition strategy (both domestic and overseas) could delay the stock returns in the near term. Maintain BUY with TP of Rs360, EV/EBITDA of 6x FY20e.

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