Explained: Why Metal Giant JSPL's Share Price Fell By 6% Today?

Metal giant, Jindal Steel & Power (JSPL) nosedived by nearly 6% on both BSE and NSE during Monday's trade. The stock continued to perform on a bearish note. Investors dumped this metal stock after the company reported a double-digit decline in both net profit and revenue for the quarter ending June 30, 2023.

JSPL stock dropped by as much as 5.64% with an intraday low of Rs 659 apiece on BSE. The fall was by 5.74% with an intraday low of Rs 658.15 apiece on NSE.

At the time of writing, JSPL's share price traded at Rs 658.15 apiece, down by Rs 29.85 or 4.3% on BSE. Its market cap was over Rs 68,070 crore.

During the June 2023 quarter, the private steel player posted a net profit of Rs 1,691.8 crore on a consolidated basis. PAT declined by 15% from profits of Rs 1,990 crore recorded in Q1 of last year. In the March quarter, the PAT was at Rs 466 crore.

Meanwhile, gross revenue stood at Rs 14,539 crore in Q1FY24, declining compared to revenue of Rs 14,762 crore in Q1FY23 and Rs 15,797 crore in Q4FY23.

Adjusted EBITDA for the quarter stood at Rs 2,704 crore in Q1FY24, falling by 17% YoY but up by 21% QoQ.

Also, in the quarter, the production stood at 2.04mt (+2% yoy, +1% QoQ). The sales stood at 1.84mt (+6% yoy; -9% QoQ) driven by seasonally weak consumption in the domestic market.

Here are the key highlights of the global ventures performance of JSPL in Q1FY24:

- Mozambique: Chirodzi mine produced 1.12mt vs 0.98mt ROM in Q4FY23 (up 14% qoq) during
the quarter. Coking coal sales stood at 142kt vs 160kt in Q4FY23. Thermal coal sales stood at 105kt vs 158kt in Q4FY23.

- South Africa: During the quarter, Kiepersol mine produced 116kt vs 115kt ROM in Q4FY23. The mine reported prime product sales of 87kt vs 90 kt in 4QFY23.

- Australia: During the quarter, Russel Vale mine's ROM production stood at 132kt vs 157 kt in Q4FY23. Dispatches for the quarter were 91kt vs 123 kt in Q4FY23. Wongawilli colliery continues to remain under care and maintenance.

Bimlendra Jha, Managing Director said, "We have now achieved a significant milestone of successfully commissioning our state-of-the-art pellet plant at Angul. We have also signed mining lease for two thermal coal mines - Gare Palma IV/6 and Utkal
C, which will lead to consistent availability of coal for our thermal coal requirements in DRI Kilns, Coal Gasification and Power Plants at lower costs."

He added, "We see it as the underlying factor in our continually improving financial and
operational performance."

As per Trendlyne data, JSPL shares RSI is overbought at 72.3, whule MFI indicator also shows strongly overbought at 85.4. Its 1-year beta is 1.47 which indicates very high volatility.

The average brokerage target in JSPL shares is Rs 735 apiece, indicating nearly 10% upside ahead.

JSPL's 1-year return has outperformed benchmarks. In a year, the stock has gained by nearly 64%, while Sensex and Nifty 50 have rallied by just 9% each.

Disclaimer

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