Anand Rathi has upgraded Jindal Steel to a 'Buy' rating with a revised target price of ₹1,410, significantly higher than previous brokerage targets. The latest research report dated July 26, 2026, highlights the company's strategic focus on expanding high-margin value-added products (VAP) and achieving 100% capacity utilisation. The stock is currently trading at 9.6x/6x EV of FY27/28E EBITDA, with Anand Rathi valuing it at 7x FY28E EV/EBITDA, in-line with its long-term average multiple. The brokerage expects EBITDA CAGR of over 40% over the low base of FY26, driven by the company's operational improvements and strategic initiatives. The company aims to gradually transition away from commoditised steel products while ramping up capacity utilisation to 100%, with successful negotiation for lower borrowing costs likely to strengthen the balance sheet by reducing leverage below the targeted 1.5x threshold.
Jindal Steel shares gained as much as 3% in early trade on Monday, July 27, following the company's stronger-than-expected Q1 FY27 performance. However, brokerage reactions remained divided despite the positive market response. Kotak Institutional Equities upgraded the stock to 'Add' from 'Reduce', though it lowered its target price to ₹1,280 from ₹1,380. The brokerage noted that adjusted EBITDA for the June quarter exceeded expectations, aided by higher sales volumes, with the slurry pipeline project remaining on track for commissioning in Q2 FY27. UBS maintained its 'Neutral' rating with a target price of ₹1,300, stating that consolidated adjusted EBITDA of ₹26.7 billion was 9% ahead of estimates, driven by better-than-expected steel production and sales volumes. CLSA reiterated its 'Outperform' rating with a target price of ₹1,420, expecting earnings to recover after a softer second quarter as steel prices improve and cost reduction initiatives begin to take effect.
The board has reappointed Vidya Rattan Sharma as additional director and managing director for two years with effect from July 24, subject to shareholders' approval. This marks a significant return for Sharma, who previously held the MD position until 2022 and was an advisor to the Naveen Jindal Group since then. Sandeep Modi was appointed chief financial officer, while Rajiv Kumar was named chief operating officer. Sukhjit S Pasricha was appointed head of human resources. The appointments come after CEO Gautam Malhotra's abrupt exit on July 15, making this one of the company's biggest management overhauls in years. As per the company's press release, "Mr. Sharma is well known to the industry and market. He enjoys an outstanding reputation within the steel industry, both in India and internationally." The management has entrusted him with accelerating the company's growth, driving operational excellence, and leading Jindal Steel into its next phase of expansion.
Jindal Steel reported a 43.58% year-on-year decline in consolidated net profit to ₹844 crore for Q1 FY27, compared with ₹1,496 crore in the year-ago period. Revenue increased 25.76% year-on-year to ₹15,501 crore from ₹12,325 crore in Q1 FY26, driven by better steel prices and a higher share of value-added products. Earnings before interest, taxes, depreciation and amortisation (EBITDA) declined 11.5% to ₹2,660.4 crore from ₹3,004 crore in the corresponding quarter last year. EBITDA margin stood at 17.18% compared with 24.43% a year ago. The decline was mainly due to higher raw material costs, interest costs on borrowings, and higher depreciation as new capacities came on stream, which outweighed the benefit of higher revenue. The company reported steel production of 2.40 million tonnes and sales of 2.23 million tonnes during the quarter, with production and sales declining sequentially by 10% and 15% respectively due to planned maintenance shutdowns across key facilities. Sales volumes increased 17% year-on-year, driven by the ramp-up of blast furnaces at Angul, while resilient domestic demand and higher exports provided additional support.
The share of value-added steel (VAS) increased to 66% in Q1 FY27 from 61% in Q4 FY26, indicating improved product mix quality. The share of exports stood at 9% during the quarter compared with 5% in the previous quarter, showing diversification efforts. NSR improved sequentially on the back of higher flat and long steel prices, along with a higher share of value-added products (VASP), resulting in stable profitability despite elevated coking coal costs and maintenance shutdown taken during the quarter. Consolidated gross revenue stood at ₹17,834 crore, down 8% sequentially. Adjusted EBITDA was reported at ₹2,667 crore for the quarter. Against CNBC-TV18 poll estimates, the company's net profit came in below the expectation of ₹930 crore, while revenue was higher than the estimated ₹13,998 crore. EBITDA was above the poll estimate of ₹2,498 crore. While production and sales were lower sequentially due to planned maintenance shutdowns, EBITDA per tonne improved on stronger steel prices and a richer value-added product mix, partly offset by higher coking coal costs and other expenses. The Delhi-based steelmaker's consolidated revenue from operations rose to ₹15,501 crore in the June 2026 quarter from ₹12,325 crore a year ago, driven by better steel prices and a higher share of value-added products.
Total expenses increased 38.7% to ₹14,296 crore from ₹10,306 crore in the corresponding quarter last year. The cost of materials consumed surged 43.7% to ₹7,741.59 crore, while other expenses rose 25.1% to ₹4,892.08 crore. Employee-benefit expenses increased 20.6% to ₹367.32 crore. Finance costs jumped 84.8% to ₹548.21 crore from ₹296.61 crore in the year-ago period. Depreciation and amortisation expenses rose 28.4% to ₹926.42 crore from ₹721.51 crore. Jindal Steel's consolidated net debt stood at ₹15,927 crore as of June 30, 2026, compared with ₹16,019 crore as of March 31, 2026, showing a decline of ₹92 crore. The net debt to EBITDA ratio increased to 1.71x as of June 30, 2026, from 1.66x at the end of March 2026. The company incurred a total capital expenditure (capex) of ₹42,409 crore during the quarter, significantly higher than the previously reported ₹1,959 crore. Jindal Steel has guided for capex of ₹8,500 crore for FY27 as reported by IDBI Capital.
Kotak expects steel volumes and EBITDA to grow at a CAGR of 27% and 49%, respectively, over FY26-29, supported by project completions and gradual margin improvement. The brokerage noted that operating leverage and the reversal of maintenance shutdown-related costs to partly offset weaker steel prices in the September quarter. CLSA highlighted that stability in the senior management team and successful execution of expansion and cost optimisation projects will be key catalysts for a rerating. The new management team's focus on ramping up production and completing ongoing expansion projects is expected to drive future growth. Management reiterated that the shutdown-related production loss would be recovered over the balance of FY27, while the share of VASP is expected to increase further as downstream facilities continue to ramp up. Anand Rathi expects the planned maintenance shutdown in Q1FY27 to be fully recovered in Q2FY27, with the temporary operating cost impact of ~₹2,000/tonne incurred during the shutdown likely to reverse. As the company progresses towards target of increasing steel production to 30k tonne per day by Dec-26, alongside a higher contribution from VAP, Anand Rathi has upwardly revised its FY27/28E EBITDA estimates by 3.7%/7.9%.
