JSPL’s competitive advantage can strengthen with project expansions
Live MintShares of Jindal Steel & Power Ltd have surged about 15% from their recent low of ₹855 apiece seen on 13 November, outpacing the sub-4% gain in the benchmark Nifty 50 index. Read this | Jindal Steel’s capacity expansion will fuel growth, but beware the China factor The company’s upcoming expansion and backward integration projects are expected to underpin a sustainable earnings growth outlook. “ expansion projects are on track to deliver 20% earnings per share CAGR over FY2024-27E, with 18% CAGR volume growth and operating leverage," said analysts at Kotak Institutional Equities in a 9 December report. This expansion would push up JSPL’s finished steel capacity from 7.2 million tonnes per annum to 13.7 mtpa by the end of FY26, with half of the expansion slated for completion by March 2025. “Low-cost brownfield expansion would have much lower incremental fixed costs and provide significant operating leverage," said the Kotak report.