Jindal Steel & Power falls 8% on profit booking post Q4 results

Shares of Jindal Steel & Power (JSPL) have declined 8% to Rs 241 per share on the BSE in noon deal trade on profit booking after the company reported a consolidated net loss of Rs 4.26 billion for the last quarter of financial year 2017-2018 (Q4FY18). This is over four times the net loss of Rs 983 million reported by the company in the corresponding quarter of financial year 2016-2017 (Q4FY17).

The net loss of the company widened during the quarter, mainly on account of a one-time expense of Rs 4.38 billion due to certain demands and claims from regulatory authorities.

Total revenue increased by 23% at Rs 85.99 billion against Rs 69.93 billion in the corresponding quarter of previous fiscal. Earnings before interest, taxes, depreciation and amortisation (EBITDA) margin improved 200 bps at 25% from 23% in year ago quarter.

On standalone basis, JSPL witnessed a turnaround in the fourth quarter and came back with Rs 1.45 billion after 13 quarters. The company reported a loss of Rs 740 million in last quarter and a loss of Rs 1.16 billion in the same quarter last year.

Analysts at SBICAP Securities increase estimates for FY19/FY20 consol EBITDA by a marginal 2.6-2.5% respectively due to higher margins in the standalone business; continued higher profitability at the Oman steel unit and lower expectation of profitability from overseas mines due to delays in ramping up production. The brokerage firm maintains ‘buy’ rating on the stock with 12 month target price of Rs 337 per share.

Thus far in the calendar year 2018, JSPL had outperformed the market by surging 28% as compared to 3.7% rise in the Sensex till Wednesday. In past one year, it zoomed 130% against 18% rise in the benchmark index.