Buy Jindal Stainless; target of Rs 910: Motilal Oswal

What happened

Motilal Oswal reported that Jindal Stainless posted revenue of INR129b in 2QFY27, up 18% year on year and 14% quarter on quarter, helped by strong average selling prices and volume recovery after a gas supply disruption. Reported EBITDA was INR14.3b, roughly in line with its INR15b estimate.

Confirmed

Global impact / market context

Higher selling prices and recovering volumes lifted revenue and profit for the stainless steel maker, while higher raw material costs partly offset the gain. Motilal Oswal expects this earnings base to support its BUY rating and INR910 target price, implying the broker sees more upside from current levels.

Analyst inference

The stock trades at 8.3 times EV/EBITDA, a common valuation measure comparing company value to operating profit, on FY28 estimates. The INR910 target is based on 11 times FY28 estimated EV/EBITDA. That higher multiple suggests the broker expects improved earnings and willingness to pay more for each rupee of operating profit.

Analyst inference

What to watch

1. Jindal Stainless reported 2QFY27 revenue of INR129b, up 18% year on year and 14% quarter on quarter, with EBITDA of INR14.3b. Watch whether volumes and selling prices hold up in coming quarters. Confirmed
2. Motilal Oswal reiterated a BUY rating with a target price of INR910, based on 11 times FY28 estimated EV/EBITDA. This is the broker's recommendation, not a guaranteed outcome. Proposed
3. Watch raw material costs, which partly offset gains from better volumes and prices. If these costs keep rising, profit per sale could shrink and challenge the earnings growth assumed in the INR910 target. Analyst inference

Evidence

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