Jindal Steel & Power stock breaks downtrend, jumps 11% in Sep after 3-month slump. More gains ahead?

For the sixth consecutive trading session on Tuesday, shares of Jindal Steel & Power, a leading integrated steel producer in India, were in positive territory, rising 2.77% to ₹1,073.70 per share, boosting the stock by nearly 11% in September alone, marking an end to a three-month slump.

Technical analysts are optimistic, predicting that the stock’s upward momentum will continue and could potentially reach a new record high. Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, said, "The past couple of weeks have been remarkable for this metal stock, with gains of over 8%, signaling the resumption of an uptrend after a few months of consolidation.

"In the near term, prices appear to be approaching their all-time high of around 1100 and may continue to rise. Any pullbacks should be viewed as buying opportunities, with 1,000 now acting as immediate support," he added.

Likewise, Ruchit Jain, Lead Research Analyst at 5Paisa, said the near trend for the stock looks positive and has shown signs of relative outperformance within the metal stocks. However, it is advisable to keep a buy-on-dip approach. The immediate support is placed in the range of ₹975-965.

Long-term outperformer

Despite the recent correction, the stock has still risen by 1000% since April 2020. Notably, it has delivered exceptional returns each quarter since CY19.

Meanwhile, on Monday, Jindal Steel and Jindal Renewables (JRPL) announced a Memorandum of Understanding (MOU) to implement India’s biggest investment in green hydrogen by any Indian steelmaker till date. This collaboration underscores a major commitment by both companies towards decarbonisation and green energy leadership in India’s steel industry.

The MOU outlines JSPL’s plan to integrate green hydrogen into its Direct Reduced Iron (DRI) units in Angul, Odisha. This initiative represents a significant leap towards low-emission steel production.

In the first phase, Jindal Renewables will develop a green hydrogen generation capacity of up to 4,500 tons per year, set to commence by December 2025. In addition, the project will also entail the supply of 36,000 tons of oxygen per year that will be used in the Angul steelworks.

JRPL will also be supplying 3 GW of renewable energy to JSPL’s facilities. reducing the steelmaker’s dependence on coal-fired energy by 50% in the next 2-3 years. This integration of green energy is expected to drastically lower the company’s carbon footprint.

JSPL will provide essential infrastructure and support, while JRPL will handle the development and operation of the green hydrogen and renewable energy facilities. This collaboration underscores a major commitment to decarbonisation and green energy leadership in India’s steel industry.

With innovative engineering, the MOU aims not only to significantly slash the cost of green hydrogen production but also to ensure a sustainable long-term business model by locking in offtake for the next 25 years.

The company is nearing completion of its capital expenditure program, which aims to double steel-making capacity at Angul from 6 MTPA to 12.3 MTPA and increase total capacity from 9.6 MTPA to 15.9 MTPA. The ₹31,000 crore investment includes funds for steel expansion, ACCP2, mining projects, and new facilities.

It plans to keep its balance sheet healthy by maintaining a net debt to EBITDA ratio below 1.5x, with most new equipment and operations expected to be commissioned between Q4 FY25 and Q3 FY26.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.