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JSL - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.0
📊 Financial Overview
- Profitability: PAT declined from ₹798 Cr to ₹642 Cr QoQ, but YoY growth remains positive at 11.0%.
- Return Metrics: ROE at 17.3% and ROCE at 19.9% reflect strong capital efficiency.
- Valuation: P/E of 23.6 is slightly above industry average (22.4), indicating fair valuation.
- P/B Ratio: With a book value of ₹197 and price of ₹756, P/B is ~3.8, suggesting moderate premium.
- PEG Ratio: -9.70 indicates earnings contraction or valuation distortion.
- Debt Profile: Debt-to-equity ratio of 0.27 is conservative, supporting financial stability.
- Momentum: RSI at 49.9 and MACD at 9.42 suggest neutral sentiment with potential for upside.
🏢 Business Model & Competitive Edge
- JSL (Jindal Stainless) is India’s largest stainless steel producer with integrated operations and strong export presence.
- Its diversified product portfolio and cost-efficient manufacturing offer resilience against commodity cycles.
- Strategic focus on value-added products and ESG initiatives enhances long-term competitiveness.
💡 Entry Zone Recommendation
- Current price is near DMA 50 (₹768) and above DMA 200 (₹708), indicating consolidation.
- Suggested Entry Zone: ₹730–₹750 for accumulation.
- Long-term holding is favorable given strong return metrics and sector positioning.
✅ Positive
- Strong ROE and ROCE indicate efficient operations.
- Low debt-to-equity ratio supports financial health.
- FII holdings increased by 0.16%, showing foreign investor confidence.
⚠️ Limitation
- Negative PEG ratio suggests valuation misalignment or earnings contraction.
- QoQ PAT decline may reflect margin pressure or seasonal effects.
- Stock trades at a moderate premium to book value.
📉 Company Negative News
- Quarterly profit dropped by ₹156 Cr, raising short-term caution.
- Minor decline in DII holdings (-0.01%) reflects cautious domestic sentiment.
📈 Company Positive News
- Strong export demand and capacity utilization support revenue growth.
- ESG initiatives and value-added product focus gaining investor attention.
🏭 Industry
- Stainless steel industry benefits from infrastructure, automotive, and industrial demand.
- Industry P/E of 22.4 supports JSL’s fair valuation.
🧾 Conclusion
- JSL is a fundamentally strong player with efficient operations and moderate valuation.
- Entry near ₹730–₹750 offers a good long-term opportunity.
- Monitor earnings consistency and PEG ratio for sustained performance.
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