Jindal Steel and Power - (Mis)fortune favors the brave - Kotak

Jindal Steel and Power (JSPL) corrected by as much as 15% on unauthenticated media reports of CBI raids on its premises to investigate misrepresentations related to allocation of coal blocks over 2004-09. While the investigation does not appear to extend to operational coal mines and hence has no impact on extant earnings (or valuations), the Street's concern about extension of the purview to operational assets possibly resulted in the sharp stock reaction.

While our valuation factors only extant operations (for coal blocks allocated between 1996 and 1998), we await more clarity on the issue, pending which we maintain our rating and target price.

Source : Equity Bulls

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