JSPL is a company with a dominant presence in steel, power, mining and infrastructure sectors. Part of the US

$ 18 billion OP Jindal Group this young, agile and responsive company is constantly expanding its capabilities

to fuel its fairy tale journey that has seen it grow to a US $ 3.3 billion business conglomerate. The company

has committed investments exceeding US $ 30 billion in the future and has several business initiatives running

simultaneously across continents.

From the widest flat products to a whole range of long products, JSPL today sports a product portfolio that

caters to markets across the steel value chain.

JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity of 3 MTPA

(million tonnes per annum) of steel at Raigarh in Chhattisgarh.

An enterprising spirit and the ability to discern future trends have been the driving force behind the company's

remarkable growth story. The organisation is wedded to ideals like innovation and technological leadership

and is backed by a highly driven and dedicated workforce of 15000 people.

JSPL has been rated as the second highest value creator in the world by the Boston Consulting Group, the

11th fastest growing company in India by Business World and has figured in the Forbes Asia list of Fab 50

companies. It has also been named among the Best Blue Chip companies and rated as the Highest Wealth

Creator by the Dalal Street Journal. Dun & Bradstreet has ranked it 4th in its list of companies that generated

the highest total income in the iron and steel sector.

The current market capitalization stands at Rs 14,016.33 crore. The company has reported a consolidated

sales of Rs 5,072.67 crore and a Net Profit of Rs 400.11 crore for the quarter ended Sep 2014.

Company Details

Category No. of Shares Percentage

Promoters 490,183,870 53.58

Foreign Institutions 182,341,208 19.93

General Public 82,801,493 9.05

Foreign Promoters 68,808,566 7.52

Other Companies 38,899,026 4.25

Financial Institutions 22,685,739 2.48

NBFC and Mutual

Funds10,764,358 1.18

Foreign - Others 10,020,657 1.10

Foreign - NRI 7,931,854 0.87

Others 433,549 0.05

Foreign Industries 33,480 0.00

Market Cap (Rs Cr) – 14011.75

Company P/E – 10.08

Industry P/E – 10.41

Book Value (Rs) – 142.79

Dividend (%) – 150%

EPS (TTM) – 15.19

Dividend Yield (%) – 0.98%

Face Value (Rs) - 1

Share Holding Pattern Financial Details

Industry Forecast

The Indian steel industry has achieved significant milestones in terms of growth in capacity, production and

exports to become a major player in the global steel industry. Between FY2008 and FY2013, India’s steel

production has grown at a compound annual growth rate (CAGR) of about 7 percent Indian steel companies

Industry revenues (top four companies) grew close to 4x, while operating profits grew by approximately 5x

during the past decade.

The Indian steel industry is divided into primary and secondary sectors. The primary sector comprises a few

large integrated steel providers producing billets, slabs and hot rolled coils, among others. The secondary

sector comprises small units focused on the production of value added products such as cold rolled coils,

galvanized coils, angles, columns, beams and other re-rollers, and sponge iron units. Both sectors cater to

different market segments. On the basis of ownership, the Indian steel industry is broadly divided into private

and public sector enterprises. The private sector dominates production accounting for almost 78 percent of

the finished steel output while the public sector has higher capacity utilizations. The demand for longs is

expected to increase by 19 million ton (MT) at a CAGR of 9 percent and for flats by 16 MT at a CAGR of 8

percent between FY2012 and FY2017.

Incumbents and challengers have announced 71 million ton per annum (MTPA) of steel capacity addition

between FY2012 and FY2017 through both brownfield and greenfield routes. However, there is considerable

uncertainty on the actual capacity addition as many projects are yet to achieve financial closure due to

delays or lack of regulatory clearances. Based on our bottom-up assessment of the announced capacity

additions, projects aggregating to 35 MTPA of crude steel capacity have already achieved financial closure.

Hence, we expect a minimum aggregate capacity of 122 MTPA to be commissioned by FY2017.

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 91.49 93.48 93.48 93.43 93.12

Equity Share Capital 91.49 93.48 93.48 93.43 93.12

Reserves 12,972.84 12,254.59 10,751.93 8,595.91 6,652.88

Networth 13,064.33 12,348.07 10,845.41 8,689.34 6,746.00

Secured Loans 12,707.31 11,577.42 6,848.09 5,085.01 4,235.16

Unsecured Loans 9,959.60 7,923.52 7,524.37 6,356.69 4,148.10

Total Debt 22,666.91 19,500.94 14,372.46 11,441.70 8,383.26

Total Liabilities 35,731.24 31,849.01 25,217.87 20,131.04 15,129.26

Application Of Funds

Gross Block 24,150.58 18,821.38 15,163.15 12,757.46 8,814.21

Less: Accum. Depreciation 5,891.25 4,665.19 3,614.14 2,757.04 2,110.15

Net Block 18,259.33 14,156.19 11,549.01 10,000.42 6,704.06

Capital Work in Progress 11,663.17 11,483.94 10,493.96 7,081.06 7,225.21

Investments 1,350.52 1,330.72 1,412.17 1,210.01 1,067.11

Inventories 3,936.25 3,598.52 3,051.31 2,204.12 1,328.50

Sundry Debtors 1,460.96 1,426.13 905.06 737.12 622.36

Cash and Bank Balance 762.00 36.77 30.94 43.71 49.49

Total Current Assets 6,159.21 5,061.42 3,987.31 2,984.95 2,000.35

Loans and Advances 8,717.43 7,777.66 6,115.66 5,111.03 3,164.54

Total CA, Loans & Advances 14,876.64 12,839.08 10,102.97 8,095.98 5,175.50

Current Liabilities 7,132.86 4,988.13 5,868.89 4,360.09 3,701.93

Provisions 3,285.56 2,972.79 2,471.35 1,896.34 1,343.71

Total CL & Provisions 10,418.42 7,960.92 8,340.24 6,256.43 5,045.64

Net Current Assets 4,458.22 4,878.16 1,762.73 1,839.55 129.86

Total Assets 35,731.24 31,849.01 25,217.87 20,131.04 15,129.26

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 14,544.02 14,954.70 13,333.95 9,574.17 7,895.58

Excise Duty 0.00 0.00 0.00 0.00 548.14

Net Sales 14,544.02 14,954.70 13,333.95 9,574.17 7,347.44

Other Income 146.85 159.28 184.48 143.16 192.87

Stock Adjustments -386.03 148.20 379.24 333.45 40.06

Total Income 14,304.84 15,262.18 13,897.67 10,050.78 7,580.37

Expenditure

Raw Materials 6,377.26 6,928.54 6,439.76 4,042.60 3,219.44

Power & Fuel Cost 926.75 939.38 838.37 568.47 391.80

Employee Cost 552.32 447.89 385.44 277.78 219.72

Other Manufacturing Expenses 752.41 0.00 0.00 0.00 446.60

Miscellaneous Expenses 1,790.39 2,848.64 1,987.13 1,436.22 233.56

Total Expenses 10,399.13 11,164.45 9,650.70 6,325.07 4,832.02

Operating Profit 3,758.86 3,938.45 4,062.49 3,582.55 2,555.48

PBDIT 3,905.71 4,097.73 4,246.97 3,725.71 2,748.35

Interest 1,083.63 820.77 536.77 285.00 331.66

PBDT 2,822.08 3,276.96 3,710.20 3,440.71 2,416.69

Depreciation 1,221.44 1,048.46 867.19 687.77 512.16

Profit Before Tax 1,600.64 2,228.50 2,843.01 2,752.94 1,904.53

PBT (Post Extra-ord Items) 1,600.64 2,228.50 2,843.01 2,752.94 1,907.46

Tax 308.69 635.95 732.36 688.82 427.78

Reported Net Profit 1,291.95 1,592.55 2,110.65 2,064.12 1,479.68

Total Value Addition 4,021.87 4,235.91 3,210.94 2,282.47 1,612.58

Equity Dividend 137.23 149.57 149.46 140.19 116.52

Corporate Dividend Tax 1.22 3.32 3.15 3.75 4.28

Dividend and Bonus History

Index and Company Comparison

Company Forecast

PBIT – 17.27 v/s 19.12

RoCE – 7.51 v/s 9.57

RoE – 10.17 v/s 13.73

Net Profit Margin – 8.79 v/s 10.53

Return on net worth – 9.88 v/s 12.89

Reserves – 12972.84 cr v/s 12254.59 cr

PAT – 1291.95 cr v/s 1592.55 cr

Total assets – 35731.24 cr v/s 31849.01 cr

Net sales – 14544.02 cr v/s 14954.7 cr

Book Value – 142.8 v/s 132.09

Days BSE NSE

30 148.06 148.10

50 148.93 148.97

150 219.52 219.55

200 234.01 234.03

Important Ratios Simple Moving Average

Recommendations

Buy JSPL at current or lower market levels

Reasons for the recommendations are :

Sound financial position of the company.

Availability of adequate manufacturing facility to meet demands.

Huge possibility of turnaround if they get back coal mine license.

Not much dip in company performance even in the industry slow down and adverse

situations.

Highly reputed group of promoters.

Higher profit margins of its products.

Under performance of the stock price when compared with its peers.

Growth in economy will increase the demand for the products.