28 Jul , 2026 By : Debdeep Gupta
Nomura has maintained its Buy rating on Jindal Steel but trimmed its target price to Rs 1,300 from Rs 1,350 after the steelmaker reported stronger-than-expected earnings for the June quarter.
The brokerage said, "Jindal Steel reported consolidated EBITDA of Rs 26.6 billion, beating our forecast and the Bloomberg consensus estimate by 13% and 7%, respectively." It attributed the earnings beat to stronger-than-expected volume growth and resilient realisations despite weakness in rebar prices.
Consolidated volumes rose 17% year-on-year to 2.23 million tonnes, exceeding Nomura's estimate by 4%, while realisations increased 12% quarter-on-quarter against the brokerage's expectation of a 5% rise.
Although conversion costs increased 16% quarter-on-quarter due to planned maintenance, Nomura said stronger operating performance more than offset the cost pressure. "Consequently, EBITDA/t improved to Rs 11,950, up 18% q-q and 9% ahead of our estimate."
Looking ahead to the September quarter, the brokerage expects consolidated volumes to remain strong at around 2.2 million tonnes, supported by the ongoing ramp-up of the Angul blast furnace. However, it expects seasonally weaker domestic demand to keep rebar prices under pressure, resulting in a projected Rs 3,400 per tonne quarter-on-quarter decline in blended realisations.
Nomura also expects higher coking coal costs of around $15 per tonne quarter-on-quarter to weigh on profitability. While the company's diversified long-product portfolio should provide some cushion, the brokerage forecasts EBITDA to decline to around Rs 9,300 per tonne in the second quarter.
Following revisions to its steel price and raw material assumptions, Nomura lowered its FY27 volume estimate by 5% to 10.5 million tonnes and reduced its FY27, FY28 and FY29 EBITDA forecasts by 5%, 8% and 11%, respectively.
Despite the estimate cuts, the brokerage retained its positive stance, saying, "We believe Jindal Steel is entering a multi-year asset optimization phase, with recently commissioned capacities driving incremental earnings at limited capital intensity." It added that "This execution-led earnings growth, combined with disciplined capital allocation, continues to justify a premium valuation relative to historical mid-cycle levels, in our view."
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