JINDALSTEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | JINDALSTEL | Market Cap | 1,12,543 Cr. | Current Price | 1,102 ₹ | High / Low | 1,170 ₹ |
| Stock P/E | 25.6 | Book Value | 515 ₹ | Dividend Yield | 0.18 % | ROCE | 11.7 % |
| ROE | 9.37 % | Face Value | 1.00 ₹ | DMA 50 | 1,051 ₹ | DMA 200 | 1,004 ₹ |
| Chg in FII Hold | -0.41 % | Chg in DII Hold | 0.36 % | PAT Qtr | 710 Cr. | PAT Prev Qtr | 921 Cr. |
| RSI | 57.4 | MACD | 23.2 | Volume | 15,66,874 | Avg Vol 1Wk | 28,37,938 |
| Low price | 750 ₹ | High price | 1,170 ₹ | PEG Ratio | -1.32 | Debt to equity | 0.13 |
| 52w Index | 83.8 % | Qtr Profit Var | -39.0 % | EPS | 32.6 ₹ | Industry PE | 20.7 |
📊 Financials: JINDALSTEL reflects moderate fundamentals with ROCE at 11.7% and ROE at 9.37%, indicating average capital efficiency. Debt-to-equity ratio of 0.13 highlights a strong balance sheet with minimal leverage. Quarterly PAT declined from 921 Cr. to 710 Cr., showing earnings pressure with a profit variation of -39.0%. EPS of 32.6 ₹ supports consistent earnings visibility, though margins remain cyclical given the steel industry’s nature.
💹 Valuation: Current P/E of 25.6 is above the industry average of 20.7, suggesting mild overvaluation. P/B ratio is ~2.14 (Current Price / Book Value), which is reasonable but not cheap. PEG ratio of -1.32 indicates weak growth prospects relative to valuation. Intrinsic value appears lower than CMP, limiting margin of safety for fresh investors.
🏢 Business Model & Competitive Advantage: JINDALSTEL operates in the steel manufacturing sector, benefiting from infrastructure, automotive, and construction demand. Competitive strengths include scale, integrated operations, and low debt levels. However, modest return ratios and cyclical earnings reduce its competitive edge compared to peers with stronger profitability metrics.
🎯 Entry Zone Recommendation: Current price of 1,102 ₹ is near its 52-week high of 1,170 ₹, limiting immediate upside. A more attractive entry zone would be around 1,000–1,050 ₹ (closer to DMA 200 at 1,004 ₹), offering better risk-reward. Long-term investors may accumulate on dips, given strong balance sheet and sector demand.
Positive
- Low debt-to-equity ratio of 0.13 ensures financial stability.
- EPS of 32.6 ₹ provides consistent earnings visibility.
- DII holdings increased by 0.36%, showing domestic institutional support.
- Strong brand presence and scale in the steel industry.
Limitation
- P/E of 25.6 above industry average (20.7), suggesting mild overvaluation.
- ROCE (11.7%) and ROE (9.37%) are modest compared to peers.
- Quarterly PAT decline from 921 Cr. to 710 Cr. (-39.0%).
- PEG ratio of -1.32 signals weak growth prospects.
Company Negative News
- Sharp decline in quarterly profits raises sustainability concerns.
- FII holdings decreased by 0.41%, reflecting reduced foreign investor confidence.
Company Positive News
- DII inflows suggest domestic support despite weak fundamentals.
- Strong demand outlook from infrastructure and construction sectors.
- Low leverage provides resilience against cyclical downturns.
Industry
- Steel industry P/E at 20.7 reflects moderate valuations.
- Sector growth driven by infrastructure, housing, and automotive demand.
- Government spending on construction supports long-term expansion.
Conclusion
⚖️ JINDALSTEL is moderately strong with low debt and consistent earnings but faces challenges from declining profits and stretched valuations. Current price offers limited upside, and accumulation is advisable only near 1,000–1,050 ₹ for better margin of safety. Long-term holding may yield moderate returns, supported by infrastructure demand, though cyclical risks remain.
I can also compare JINDALSTEL’s valuation multiples against JSW Steel and Tata Steel to highlight relative positioning if you’d like.