Jindal Steel and Power - Q4FY2013 Result Update - Nirmal Bang

- Jindal Steel and Power (JSPL) posted a very disappointing performance for 4QFY13, with EBITDA/PAT being 13%/19% below our estimates and 17%/22% below street estimates, respectively.

- The steep fall in steel realisation and power tariff are the primary reasons for disappointing performance. We are surprised at the sharp drop in steel realisation, to the tune of 9% QoQ (partially driven by change in the product mix). We would seek further clarity on this at the conference call scheduled on 26 April 2013 at 3PM, and may review our earnings estimates and stock rating.

- Currently, we have retained our earnings estimates and target price of Rs300 on JSPL. We have also retained our Sell rating on it due to regulatory overhang and meagre return ratios following the expansion.

Source : Equity Bulls

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