Jindal Stainless shares slip 5%; stock nears 52-week low in firm market

During the first nine months of fiscal 2025, the Ebitda per tonne has slightly moderated to ₹20,837, which was largely on account of global macroeconomic factors and subdued export demand

Jindal Stainless (JSL) share price slipped 5 per cent to ₹593.40 on the BSE in Monday’s intra-day trade amid heavy volumes after the company informed the exchanges that Anurag Mantri has resigned from the post of Executive Director and Group CFO.  Accordingly, he will cease to be the Executive Director and Group CFO of the Company with effect from April 4, 2025.

 

At 02:25 pm, JSL was quoting 4.9 per cent lower at ₹595.05, as compared to the 1.52 per cent rise in the BSE Sensex. The average trading volumes on the counter jumped over three fold. A combined 3.8 million shares have changed hands on the NSE and BSE. The stock is trading close to its 52-week low price of ₹568.70 that it touched on February 17, 2025.

 

 

India’s leading stainless-steel manufacturer, JSL is ramping up its facilities to reach 4.2 million tonnes of annual melt capacity in FY27. It has 16 stainless steel manufacturing and processing facilities in India and abroad, including in Spain and Indonesia, and a worldwide network in 12 countries, as of March 2024.

 

The company’s product range includes stainless steel slabs, blooms, coils, plates, sheets, precision strips, wire rods, rebars, blade steel and coin blanks. JSL relies on its integrated operations to enhance its cost competitiveness and operational efficiency.

 

In the first nine months (April to December) of the financial year 2024-25 (9MFY25), JSL reported a 12.9 per cent year-on-year (YoY) drop in its consolidated profit after tax at ₹1,910 crore. Net revenue remained flat at ₹29,118 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin contracted to 12.38 per cent from 12.60 per cent.

 

A combination of continuously declining stainless steel prices in global markets and incessant low-priced imports pressured margins in both domestic and export markets, thereby affecting profitability.

 

Recent times in the Indian steel and stainless steel industry have been witness to the adverse effects of subsidised dumping of inferior quality products by countries having surplus capacities. With India still being the fastest growing major economy globally, the domestic industry needs immediate government measures to stop dumping of surplus quantities into India, and circumvention of quality norms through several FTA countries, the management said.

 

During the first nine months of fiscal 2025, the Ebitda per tonne has slightly moderated to ₹20,837, which is largely on account of global macroeconomic factors and subdued export demand, according to CRISIL Ratings.

 

Overall, CRISIL Ratings expects the consolidated Ebitda per tonne to remain at ~₹20,000, supporting a healthy consolidated Ebitda and strong financial profile with net leverage (ratio of net debt to Ebitda) below 1.5x during the period.

 

Also, CRISIL Ratings expects that the earnings of JSL are not to be materially impacted by the potential increase in trade tariffs by the US on stainless steel and other imports, given the limited exposure of JSL to the US (expected to be < 5 per cent of JSL’s total volume). However, developments on the said front will remain a monitorable.

 

Despite the increase in consolidated debt due to prominent acquisitions as well as working capital demand, we expect to witness improvement in leverage ratios from FY26 onwards on account of repayments being supported by additional earnings from these acquisitions and expansions itself, CARE Ratings said.

 

However, the ratings agency said the rating remains partially offset by the volatile nature of raw material prices (primarily nickel and chrome), domestic demand for stainless steel being offset by dumping from cheaper Chinese imports (via Vietnam and other ASEAN FTA route), geo-political trade wars, forex fluctuations and the cyclical nature of the SS industry. Ensuring stringent control over existing capex activity, meeting completion timelines and without cost overrun will continue to remain a key monitorable for CARE Ratings.