Jindal Stainless capacity expansion and value-added mix support sustained earnings growth

Investment View and Valuation

In its September 28, 2026 report, ICICI Securities maintains a BUY rating on Jindal Stainless. The broker believes that structural stainless-steel demand, capacity-led volume growth, a richer value-added product mix and deeper backward integration can support sustained earnings growth.

The target price is Rs 915, based on 10.5x FY28E EV/EBITDA, compared with the report’s CMP of Rs 750. Continued promoter buying from the open market also reinforces ICICI Securities’ long-term investment thesis.

Industry Position and Demand Outlook

Jindal Stainless is described as India’s leading stainless-steel company and one of the top five global stainless-steel producers excluding China. It operates integrated capacity of about 4.2 million tonnes per annum, comprising 3 MTPA in India and 1.2 MTPA in Indonesia.

ICICI Securities sees favourable industry demand conditions. Indian stainless-steel consumption grew at about 13 per cent CAGR during FY21 to FY25, while domestic per-capita consumption of about 3 kg remains below the global level of about 6 kg. The broker believes this leaves significant scope for growth in stainless-steel use across infrastructure applications.

Capacity Expansion and Volume Growth

Jindal Stainless has retained its FY27E volume-growth guidance of 7 to 9 per cent despite sales volume declining 7 per cent in Q1FY27. The company targets sales volume of about 3.5 million tonnes by FY29.

The recently commissioned 1.2 MTPA Indonesian melting facility, in which Jindal Stainless holds a 49 per cent stake, is an important growth contributor. ICICI Securities also identifies the proposed approximately 4 MTPA Maharashtra greenfield project as the next capacity growth leg beyond FY29.

Value-Added Products and Backward Integration

Margins are expected to benefit from the expansion of higher-value-added products and raw-material integration. Jindal Stainless is adding HRAP and CRAP capacity at Odisha and is investing about Rs 900 crore in cold-rolling capacity.

Its 49 per cent stake in a 0.2 MTPA nickel pig iron project is expected to provide cost-efficient access to nickel, a key stainless-steel input. Consolidated EBITDA per tonne remained resilient at about Rs 22,900 in Q1FY27 despite lower LPG availability and West Asia-related logistics disruption, supported by a favourable product mix. ICICI Securities estimates EBITDA per tonne of Rs 23,000 in FY27E and Rs 24,500 in FY28E as operations normalise.

Financial Outlook

The broker characterises Q1FY27 results as steady. It expects net sales, EBITDA and net profit to increase through FY28E, with EBITDA margins expanding to 13.3 per cent and net profit delivering a 19.4 per cent FY26 to FY28E CAGR.

Net sales are expected to grow at a FY26 to FY28E CAGR of 12.8 per cent, while net profit is forecast to rise to Rs 3,746 crore in FY27E and Rs 4,552 crore in FY28E.

Cash Flow, Leverage and Returns

Jindal Stainless has net debt to EBITDA below 1x despite a capex programme of about Rs 5,400 crore. ICICI Securities expects annual operating cash flow to exceed Rs 5,000 crore as new capacities ramp up, enabling further deleveraging and supporting projected RoCE of about 17.6 per cent by FY28E.

Key Risks

• Sharp volatility in raw-material prices could hurt profitability.
• A surge in cheap imports could pressure margins.