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Hidden Gem - Jindal Stainless

ICICIdirect Research 26 Sep 2025 DISCLAIMER

Jindal Stainless, is India’s leading stainless-steel company, with capacity of ~3 million tons per annum. 
India’s stainless-steel demand grew at a healthy CAGR of 13% over FY21-25 to 4.8 MT in FY25.
Despite this, India per capita consumption is pegged at just ~3 kg vs. global average of ~6 kg.
With fundamental levers in place, driven by increase in applications in automotive and process industries, while emerging sectors such as green hydrogen, nuclear energy and defence provide additional growth drivers, the demand for stainless steel is expected to grow at 7% CAGR to 6.5 MTPA by FY30. 
To capture this growth, JSL is expanding through a 1.2 MTPA stainless melting shop in Indonesia (JV with 49% equity stake), which will boost overall capacity by ~40% to 4.2 MTPA.
Moreover, JSL has announced a ~4 MTPA greenfield project in Maharashtra, with phased capex over the next 15 years period, ensuring a strong pipeline for long term growth.
Additionally, downstream capacity expansion at its Odisha facility and recent acquisitions will strengthen its value-added portfolio, thereby improving operating performance.
Consequently, consolidated EBITDA/ton is expected to improve to ~₹21,500 by FY28E vs. ~₹19,700/ton reported in FY25.
Notably, JSL has consistently maintained a healthy balance sheet, with Net Debt to EBITDA below 1x, despite executing a significant capex of ~₹5,400 crore.
We build in Sales Volumes and PAT CAGR of 9% & 16% respectively over FY25-28E with RoCE improving from 15% to 17.5% in FY28E.
Furthermore, the anticipated anti-dumping duty on stainless steel imports will act as a key catalyst for the company as the recent surge in imports accounting ~36% of India’s stainless-steel consumption in FY25, have impacted the overall domestic stainless-steel realization.
Thus, we have a positive view on Jindal Stainless amidst its market leadership and healthy demand prospects in the stainless-steel space. We assign BUY rating on the stock with target price of ₹940 i.e. 12.5x Av FY27E-28E EV/EBITDA (a tad premium given long term high growth rate driver in this domain).

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