IIFL is optimistic on the perormance of Jindal Steel & Power (JSPL) as it feels that it has been investing heavily in its business in the past two years. The standalone power capacities are expected to be operational by Q1 FY’13, followed by the 1.6mtpa steel plant at Angul in H2 FY13. In FY’13, earnings growth for the consolidated entity is expected to be 11.3 per cent led by a jump in contribution from JSPL’s standalone power plants and superior product mix. The company’s earnings would surge 54.8 per cent yoy in FY14, led by contribution from the 1.6mtpa Angul steel plant, higher PLF’s for the standalone power capacities and higher consumption of sponge iron. IIFL has used Sum-of-The-Parts (SoTP) valuation method to value the company.
IIFL has maintained a buy for the stock and has projected a targt price of Rs 671 for the stock. Remember to bookmark us for stock market tips and make money with our sure tip of the day.
