Jindal Steel: Axis Securities backs high-conviction buy on Angul expansion and margin gains

Axis Securities’ Axis PUNCH has placed Jindal Steel Ltd. back under the spotlight, tagging the stock as a high‑conviction BUY for the next three to six months. The brokerage sees a target of Rs 1,123 per share versus the closing price of Rs 1,021 on 31st December, 2025, implying about 10% potential upside.

The investment case, outlined by Axis Securities, rests on three broad pillars. These are a large capacity build‑out led by the Angul plant, margin gains through backward integration and value‑added products, and a meaningfully lighter balance sheet. The stock also trades at what Axis Securities considers an inexpensive multiple of around 7x FY28 EBITDA estimates.

Axis Securities expects Jindal Steel shares to benefit from a heavy capital expenditure cycle that is already advanced. The company has planned total capex of Rs 47,040 crore up to FY28E, including the Angul expansion and nearly Rs 16,000 crore earmarked for cost‑efficiency projects in FY26‑FY28. By September 2025, Jindal Steel had already spent Rs 30,850 crore under this plan.

Remaining capital expenditure is expected to be funded through internal accruals, according to Axis Securities. The research team estimates that Jindal Steel can keep Net debt/EBITDA below 1.5x across the cycle. That ratio has already fallen from 4.56x in FY20 to 1.48x by Q2FY26, reflecting reduced leverage and stronger cash‑flow support for Jindal Steel shares.

On valuation, Axis Securities highlights that Jindal Steel shares are trading at about 7x FY28 EBITDA. The brokerage stated: "As per our estimates, the stock is currently valued at 7x of FY28 EBITDA, which appears to be attractive. Accordingly, we recommend a BUY on the stock with a target price of Rs 1,123/share, implying an upside of 10% from the CMP," commented the research analysts of Axis Securities.

A central factor behind Axis Securities’ stance on Jindal Steel shares is the Angul facility expansion. On 26th September 2025, Jindal Steel raised iron‑making capacity there to 15.02 million tonnes from 10.42 million tonnes. This followed commissioning of a 4.6 million tonne blast furnace (BF‑II), which almost doubled hot metal capacity at Angul to 10.65 MTPA from 6 MTPA.

Synchronized with this iron‑making ramp‑up, Jindal Steel commissioned a 3 MTPA Basic Oxygen Furnace (BOF‑II) in phase I at Angul. Crude steel capacity at the site increased from 6 MTPA to 9 MTPA, taking overall company steelmaking capacity to 12.6 MTPA from 9.6 MTPA. Phase II at Angul plans an additional 2 MTPA DRI‑II and 3 MTPA BOF‑III by March 2027.

Following completion of Phase II, Jindal Steel’s total steel capacity is projected to rise to 15.6 MTPA. Iron‑making capacity is expected to reach 17.02 MTPA. For investors in Jindal Steel shares, Axis Securities sees this incremental volume base as a key driver of revenue growth and operating leverage across FY26‑FY28.

Jindal Steel shares: structural steel expansion and product profile

Beyond Angul, Jindal Steel recently outlined a separate expansion of its structural steel operations at Raigarh. The company plans to lift structural steel capacity from 1.2 MTPA to 2.4 MTPA by mid‑2028. This move is designed to reinforce Jindal Steel’s position in structural steel and expand domestic supply of heavy and ultra‑heavy sections.

As part of that Raigarh roadmap, Jindal Steel intends to commission a new specialised structural steel mill. This plant will enable output of larger and more complex parallel flange sections required for major energy and infrastructure projects. The plan is paired with upstream and downstream technology upgrades to support these advanced profiles and improve overall efficiency.

Currently, Jindal Steel produces parallel flange sections weighing up to 333 kg per metre, with section depths from 100 mm to 900 mm. After the planned upgrades, the company targets ultra‑heavy sections with depths of 1,100 mm and weights of up to 1,500 kg per metre. Jindal Steel expects this capability to support large projects across several Indian sectors.

Jindal Steel stated: "These enhanced capabilities will support growing demand from infrastructure, refinery, power, renewable energy, transmission, and high-rise construction projects, while significantly reducing India's reliance on imported heavy structural steel sections," said Jindal Steel in a statement.

Adding further detail on strategy for Jindal Steel shares, Subrat Panda, Head - Structures & CSB, Jindal Steel, said: "Doubling our structural steel capacity at Raigarh is a strategic step towards building long-term domestic capability for large and complex projects. With the ability to manufacture the largest parallel flange sections in India, we are enabling faster execution, improved design efficiency, and reduced dependence on imports for critical infrastructure and energy applications."

Jindal Steel shares: backward integration, mines and cost structure

Axis Securities also underlines margin improvement efforts that could support Jindal Steel shares over the medium term. Jindal Steel is deepening backward integration, raising the share of value‑added products and boosting captive power. Iron ore needs are partly met from captive mines at Kasia, with capacity of 3.11 million tonnes, and Tensa, with capacity of 7.5 million tonnes.

The company has additionally acquired the Roida‑I iron ore and manganese block, which has capacity of 3 MTPA. A key logistics project, the iron ore slurry pipeline from Barbil to Angul, is about 90% complete and is guided for commissioning in the second half of FY26. This pipeline aims to lower freight costs and stabilise ore supply to Angul.

Jindal Steel is also building its captive coal base for both Jindal Steel shares value and operational resilience. Out of four coal blocks, Utkal C and Gare Palma IV/6 are presently operational. The remaining two, Utkal B1 and Utkal B2, are at advanced stages of mine development. Jindal Steel expects coal mining at Utkal B1 to commence during the second half of FY26.

Within its 1.2 MTPA cold rolling mill (CRM) complex, Jindal Steel commissioned a 0.20 MTPA continuous galvanising line (CGL‑1) in Q1FY26. Multiple additional lines are progressing towards commissioning in FY26. The first 525 MW module of the Sub‑critical Boiler Plant has been readied, with grid synchronisation expected in Q3FY26, while work on the second module continues.

Jindal Steel shares: key data points for investors

For finance readers tracking Jindal Steel shares, the main operational and financial numbers referenced by Axis Securities are set out below.

Parameter	Detail
Target price (Axis Securities)	Rs 1,123 per share
CMP as of 31st December, 2025	Rs 1,021 per share
Implied upside	10%
Total planned capex till FY28E	Rs 47,040 crore
Capex incurred by September 2025	Rs 30,850 crore
Net Debt/EBITDA FY20	4.56x
Net Debt/EBITDA Q2FY26	1.48x
Angul iron‑making capacity (post expansion)	15.02 MT
Company steel capacity after Angul Phase I	12.6 MTPA
Planned total steel capacity post Phase II	15.6 MTPA
Planned total iron‑making capacity post Phase II	17.02 MTPA
Structural steel capacity (current)	1.2 MTPA
Structural steel capacity (mid‑2028 target)	2.4 MTPA
Valuation multiple (FY28 EBITDA)	7x

The research view from Axis Securities on Jindal Steel shares rests on expanding volumes, better cost structures and controlled leverage. However, the usual market and sector risks around commodity prices, project execution and policy changes still apply. The published note also carries a disclaimer that the views are those of the analysts and do not represent Goodreturns.in or Greynium Information Technologies Private Limited.

The disclaimer stresses that the organisations do not guarantee accuracy or completeness of the research view on Jindal Steel shares. It also clarifies that the content does not amount to investment advice or a solicitation to buy or sell securities. Readers are advised to treat the information as educational and to consult licensed financial advisors before taking investment decisions.