Sell JSW Steel, target price Rs 475: ICICI Securities

ICICI Securities has sell call on JSW Steel with a target price of Rs 475. The current market price of JSW Steel Ltd. is Rs 641.8. Time period given by analyst is one year when JSW Steel Ltd. price can reach defined target.

JSW Steel Ltd., incorporated in the year 1994, is a Large Cap company (having a market cap of Rs 154375.78 Crore) operating in Metals - Ferrous sector.

JSW Steel Ltd. key Products/Revenue Segments include Hot Rolled Coils/Plates/Sheets, Rolled Product, Coils (Cold Rolled), Coils & Sheets (Galvanised), Iron Ore, Billets & Blooms, Others, Other Operating Revenue, M S/S S Slabs for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 41966.00 Crore, up 9.64 % from last quarter Total Income of Rs 38275.00 Crore and up 25.46 % from last year same quarter Total Income of Rs 33449.00 Crore. Company reported net profit after tax of Rs -859.00 Crore in latest quarter.

Investment Rationale
Despite likely improvement in performance in the coming quarters, the brokerage sees JSTL being vulnerable to steel cycle more than its peers owing to its high level of committed capex and surplus capacity. On valuations, the stock is trading at an expensive 6.8x FY24E EBITDA (including acceptances). It re-initiates coverage on JSTL with SELL rating, valuing it on 5.7x (mid-cycle multiple) FY24E EV/EBITDA with a target price of Rs 475.

Promoter/FII Holdings
Promoters held 45.02 per cent stake in the company as of 30-Jun-2022, while FIIs owned 10.61 per cent, DIIs 9.07 per cent.