4 February 2015
3QFY15 Results Update | Sector:
Metals
Jindal Steel & Power
BSE SENSEX
28,883
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Free float (%)
S&P CNX
8,724
JSP IN
914.9
350/125
-9/-56/-79
38.9
n
CMP: INR154
n
TP: INR140 (-9%)
Neutral
Jindal Power, global ventures disappoint
In-line EBITDA:
Consolidated EBITDA declined 13% QoQ to INR14.3b (our
estimate: INR14.7b). Standalone EBITDA declined 7% QoQ to INR10.3b (our
estimate: INR9.2b), as captive power generation grew 29% QoQ. Jindal Power
disappointed, with QoQ decline in generation and lower margin. Global ventures
remain a drag on EBITDA due to poor performance of coal mining assets.
Reports loss:
Interest expenses jumped 17% QoQ to INR7b, as net debt increased
by INR42.5b to pay for INR31b coal levies. Depreciation increased 10% QoQ to
INR7.1b due to capitalization of billet caster at Angul, steel melt shop at Shadeed,
etc. At the PAT level, JSP reported a loss of INR16.7b, including provisions of
INR18.55b towards coal levies. Adjusted PAT was INR2.36b.
Cutting estimates, target price:
The performance of global ventures is not
improving on expected lines. We have increased losses from overseas in our
estimates to factor slower than expected recovery. As a result, consolidated
EBITDA is down 0.7% to INR62.4b for FY15 and 4.4% to INR60.8b for FY16. We
have cut our target price by 11% to INR140, based on FY16 estimates. We value
the stock at INR200/share based on FY17 estimates.
Uncertainties abound; maintain Neutral:
JSP is undergoing major change of
business model due to de-allocation of coal mines and closure of Sarda mines.
Margins in the merchant pellet business are on structural decline due to
overcapacity. Under the changed circumstances and uncertainties on e-auction,
PPA, FSA and Sarda iron ore mines, it is difficult to accurately forecast earnings.
The recently disclosed list of bidders suggests that e-auction of coal blocks will be
aggressive and JSP has only marginal strategic advantage over competition. The
stock trades at significant discount to replacement cost, but RoCE too has shrunk
significantly. We prefer to wait for the clouds of uncertainties to clear, as the
business environment is still challenging. Maintain
Neutral.
M.Cap. (INR b) / (USD b) 140.5/2.3
Avg Val (INRm)/Vol ‘000 1101/5187
Financials & Valuation (INR Billion)
Y/E MAR
Sales
EBITDA
Adj. PAT
AdjEPS(INR)
EPS Gr(%)
RoE (%)
RoCE (%)
P/E (x)
P/BV
EV/EBITDA
( )
Estimate change
TP change
Rating change
2015E 2016E 2017E
210.4
62.4
12.0
13.1
-37.2
5.6
5.8
11.7
0.7
9.0
245.5
60.8
3.5
3.8
-70.7
1.7
4.8
40.1
0.7
9.3
296.4
72.8
10.5
11.4
198.0
5.0
6.7
13.5
0.7
7.7
n
n
66%
11%
Sanjay Jain
(SanjayJain@MotilalOswal.com); +91 22 3982 5412
Dhruv Muchhal
(Dhruv.Muchhal@MotilalOswal.com); +91 22 3027 8033
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.

Jindal Steel & Power
3Q results: subsidiaries disappointed
Captive power generation spike helped standalone operations
Consolidated EBITDA declined 13% QoQ to INR14.3b (v/s est. of INR14.7b).
Standalone EBITDA declined 7% QoQ to INR10.3b (above est. of INR9.2b) as captive
power generation increased 29% QoQ. Jindal power disappointed with QoQ decline
in power generation and lower margin. Global ventures continue to remain a drag
due to poor operating performance of coal mining assets.
Interest expenses jumped 17% QoQ to INR7b as net debt increased by INR42.5b to
INR419b to pay for INR31b coal levies. Depreciation increased 10% QoQ to INR7.1b
due to capitalization of Billet caster at Angul and steel melt shop at Shadeed.
Reported PAT at loss of INR16.7b included INR18.55b provisions towards coal levies.
Adjusted PAT was INR2.36b.
Standalone: captive power generation spiked
n
n
n
n
n
n
n
Standalone sales grew 7% QoQ (-3% YoY) to INR36.6b driven by 4% QoQ (-7%
YoY) increase in steel sales volume (to 714kt) and increase in captive power unit
sales (790 M kWh v/s nil in 2Q). CPP generation increased 29% QoQ to 2,068
Mkwh.
Steel sales volume came lower than our estimate of 874kt primarily on account
of slower-than-expected ramp-up at Angul and difficulties in sourcing iron ore,
in our view. Pellet sales were not material during the quarter (241kt in 2Q) due
to iron ore supply constrains.
Steel division sales grew 7% QoQ to INR32.8b, despite lower pellet sales and
just 4% growth in sales volume, implying the company was better able to
maintain realization (in-fact achieve higher realization on product mix). This
came as a surprise considering the weak domestic steel prices during the
quarter on China/CIS import ‘dumping’.
EBIDTA was down 7% QoQ (-15% YoY) to INR10.2b primarily on higher raw
material cost.
Implied raw material cost increased to ~INR15,100/t of steel from ~INR13,400/t
of steel in 2Q. With iron ore prices in Odisha/Chhattisgarh correcting by
~INR1,200/t since beginning January raw material costs are expected to decline
going ahead. JSPL’s iron ore supplies from its major supplier – SMPL – remain
suspended. JSPL has ramped up iron ore at its Tensa captive iron ore mines to
bridge the gap partially.
Interest cost increased 24% QoQ (51% YoY) to INR5.5b as net debt increased 8%
QoQ to INR263b despite cut in capex by half to INR5.5b during 3QFY15. JSPL had
to borrow to pay coal levies pursuant to Supreme Court order regarding de-
allocation of coal mines. During the quarter, JSPL commissioned 2.3mtpa billet
caster and 175kt heat treatment shop at Angul.
JSPL recorded an exceptional charge of INR7.8b (ex-Jindal Power) related to the
levy of INR295/t of coal as per the Supreme Court coal block de-allocation order.
The cash out flow is higher at INR19.9b. JSPL believes that there should be no
levies on washery rejects. Auditors have qualified the statement for same.
Reported PAT, accounting for the exceptional charge, was a loss of INR6.7b.
Adjusted PAT declined 59% QoQ to INR1.2b.
2
4 February 2015

Jindal Steel & Power
Exhibit 1: Quarterly performance (standalone)
Source: MOSL, Company
Exhibit 2: Standalone steel sales grew 4% QoQ (-7% YoY) to 714kt
Steel product sales
Steel product production
Source: MOSL, Company
Exhibit 3: Pellet sales were insignificant on lower iron ore availability
production
898 938
800 867 829
1072 1006 1032
Sales
1067 1049 1032
966 1038 1001
911 915
745
658
623 658 551 639
635
526 464
525
550
395 436
347
320
241
210 226
118
100 30
0
Source: MOSL, Company
4 February 2015
3

Jindal Steel & Power
Exhibit 4: Captive power sales surged during the quarter
Sales (M Kwh)
557 584 547 603 517
350
256 299 259 222
180
384
116
300 290 350
0
790
Source: MOSL, Company
Jindal Power: Generation & realization decline QoQ
n
n
n
Gross generation in the quarter was down 4% QoQ to 2,699 MU, coming 6%
below our estimate. Tamnar-I operated at ~96% utilization (higher QoQ) with
lower generation driven by performance at Tamnar-II.
Net realization was down 8% QoQ to INR3.29/kWh, lower than our estimate of
INR3.34/kWh. Lower-than-expected power unit sales and realization led to 7%
miss at sales of INR8.2b. EBITDA at INR4.1b (INR1.6/kWh of unit sold) was down
21% QoQ and 16% below our estimate.
During the quarter, the company signed additional long term PPA contracts of
350MW with KSEB. This takes its total contracted PPAs to 950MW of total
capacity of 3,400MW. Long/medium term PPAs are pre-requisite to burn coal
from mines secured in the auction. Securing PPAs will ensure continuity in
operations for JPL after winning coal block in the auction.
Exhibit 5: Jindal Power quarterly performance
Source: MOSL, Company
Global Ventures: remains subdued
n
n
Global ventures (GV) i.e. all subsidiaries (excluding Jindal Power) reported
EBITDA loss of INR150m (v/s. EBITDA loss of INR1.37b 2QFY15).
The operating performance of Australia and South African coal mines suffered
due to issues of environmental clearance and labor productivity. These issues
are in advance stage of resolution.
4 February 2015
4

Jindal Steel & Power
n
n
n
n
Mozambique coal exports declined 16% QoQ to 97kt and EBITDA loss reduced
44% QoQ to INR75m.
South Africa coal mine EBITDA declined 69% QoQ to INR39m as sales declined
59% QoQ to 101kt.
Shadeed, Oman EBITDA declined 28% QoQ to INR1.7b as HBI production
declined 5% QoQ to 340kt and HBI sales declined 39% QoQ to 241kt. 2QFY15
sales of HBI had included liquidation of inventories. Steel production too
declined 49% QoQ to 95kt due to teething problems of new steel melt shop and
billet caster. Operations are now normalized.
Wollongong’s coal production declined 27% QoQ to 40kt.
4 February 2015
5

Jindal Steel & Power
Valuation and views
TP: INR140, downside 9%; maintain Neutral
Implication from results
The performance of GV is not improving on expected line. We have increased losses
from overseas in our estimates to factor slower than expected recovery. As a result,
consolidated EBITDA is down 0.7/4.4% to INR62.4/60.8b for FY15/FY16.
Target price cut 11% to
INR140/share based on
FY16. Stock is valued on
INR200/share based on
FY17 estimates
Interest expenses are higher because of additional debt towards coal levies. Actual
depreciation is higher than our estimates. As a result, there is a sharper cut in EPS by
9/66% for FY15/FY16. The sensitivity of earnings is high because of thin PAT margin
(1 to 3%). We have cut target price by 11% to INR140/share because of slower than
expected recovery in overseas coal mining operations. We value the stock at
INR140/share and INR200/share based on FY16 and FY17 estimates.
Maintain
Neutral.
Outlook and view
JSPL continues to face headwinds from coal block de-allocation with uncertainty
around securing a coal block in the upcoming auction given likely aggressive
competition and weak domestic steel prices amid ‘dumping’ by Chinese/CIS
suppliers.
Non-regulated: stiff
competition for Gare Palma
IV/1 and IV/7 – very little
strategic advantage for JSPL
JSPL has submitted four technical bids each for Gare-Palma IV/1 and IV/7 in non-
regulated category. These blocks have received a total of 11 and 16 bids
respectively. Hence, the competition is likely to be stiff. Hindalco’s Aditya & Hirakud,
Sesa-Sterlite’s (SSLT) Balco & Jharsuguda aluminum smelters are likely to provide
stiff competition. Although JSPL has location advantage, the aluminum smelters are
equally desperate to secure coal mines and in-general can afford a little higher cost
over sponge iron producers, in our view. The little higher affordability will be
sufficient to cover the extra transportation cost between Raigarh and
Jharsuguda/Korba/Sambalpur. Cost of transportation between the mines and
Raigarh is common for everyone (including JSPL). Therefore, we believe that JSPL
has very little strategic advantage over the 4 aluminum smelters.
Jindal power has split its 3400MW assets in 3 projects of 1000MW, 1200MW and
1200MW to bid for 3 coal mines i.e. 6.9mtpa Gare-Palma IV/2&3, 2.3mtpa Toksud
North, and 2.8mtpa Amelia North.
n
For Gare-Palma IV/2&3, Adani (Avantha is 70km away), DB power (72km), SSLT
(150km), and KSK (160km) are closest competition. JSPL has submitted 3 bids,
while there are total of 11bids for this block.
n
For Tokisud North, Essar power is best placed at a distance of 111kms only,
while Jindal power is about 414kms. There are a total of 12 bids. Barring Essar,
all other bidders are at a distance of more than 350kms.
n
For Amelia North, Essar (50kms) and JP power (91kms) are best placed among a
total of 12 bidders. Jindal power is at a distance of 387kms.
Power category: Jindal
power at advantage for
Gare-Palma IV/2&3 but
Adani and DB power will
provide stiff competition,
no real advantage for
Tokisud and Amelia blocks
4 February 2015
6

Jindal Steel & Power
Although winning of coal blocks is very important for JSPL to secure coal supply for
its steel and power assets, yet the earnings will be squeezed as the cost of coal will
rise for steel business, while the revenue will shrink for its power subsidiary.
Further, the profitability on merchant sale of pellets remains a question mark in
view of over capacity of pellet plants and weaker steel demand and pricing pressure.
Key assumptions
In our estimates, we are factoring that cost of coal will increase by INR1000/t for
6mtpa coal that it used to secure from its captive coal mine Gare Palma IV/1. We are
assuming no merchant sale of pellets. For Jindal power, we are factoring EBITDA of
INR1.6/kwh in FY16 and INR1.3/kwh thereafter. Also, we have assumed that Sarda
mines will remain closed. Any variation to this in final results of coal block E-auction
may provide upside/down side.
Key catalysts over the next 12 months
n
n
n
Securing coal block in the upcoming auction at economical terms
Securing long term PPAs for its Tamnar 3,400MW IPP
Recovery in domestic steel demand
Key risks
n
n
Unable to secure coal block in the upcoming auction
Higher-than-expected decline in steel realization amid continued pressure from
China and CIS
(INR million)
FY12
46,055
FY13
47,773
FY14
40,941
FY15E
43,302
6.5
281,465
207,196
68,868
169,416
136,520
65,685
244,180
192,303
57,764
353,529
178,112
FY16E
35,697
6.5
232,031
213,054
FY17E
41,023
6.5
266,652
214,634
Exhibit 6: Target price derivation
YEAR
Steel Business
A. EBITDA
B. Target EV/EBITDA(x)
C. EV (AxB)
Jindal Power (JPL)
D. PV of JPL's FCFF
Consolidated
EBITDA
E. Enterprise Value (C+D)
F. Net Debt
G. CWIP
H. Discount on CWIP (%)
Equity Value (E-F+G*(1-H%))
Target price (INR/share)
62,381
60,779
72,808
488,661 445,085
481,286
418,902 423,043
420,745
104,774 105,623
122,478
0
0
0
174,533 127,665
183,019
191
140
200
Source: MOSL, Company
4 February 2015
7

Jindal Steel & Power
Exhibit 7: Income statement segmental details
Y/E March
Net sales
Steel business (incl. CPP)
Standalone
Steel sales (kt)
Pellet sales (kt)
Shadeed
HBI (kt) production
Steel (kt) sales
Wollongong (GNM)
Coking coal (kt)
Others
Jindal power
Sales (Mkwh)
EBITDA
Steel business (incl. CPP)
(a) Standalone
EBITDA/t of steel
(b) Global Venture
1. Shadeed
EBITDA/t of HBI
2. Wollongong (GNM)
EBITDA/t of coal
3. Others
Jindal power
EBITDA (INR/kwh)
Depn. & Amortization
EBIT
Net Interest
Other income
PBT before EO
Adjusted PAT
Change (%)
No. of shares (m)
EPS (INR)
RoE
RoCE (pre-tax)
FY12
182,086
151,683
133,340
2,385
1,995
27,961
1,200
FY13
198,068
172,971
149,547
2,843
2,112
29,012
1,520
FY14
200,040
175,473
145,440
2,935
2,035
32,621
1,468
FY15E
210,362
177,854
143,681
3,389
529
38,416
1,500
800
762
317
-5,005
32,508
9,929
62,381
43,302
42,699
12,600
603
7,826
5,217
-3,988
-3,235
19,079
1.9
27,447
34,934
25,506
1,670
11,098
11,996
-37.2
915
13.1
5.6
5.8
(INR million)
FY16E
FY17E
245,514
296,433
190,495
212,533
156,524
171,716
3,893
4,371
0
0
35,377
42,222
1,500
1,500
1,200
1,200
1,183
1,183
355
400
-2,588
-2,588
55,019
83,901
15,551
24,603
60,779
72,808
35,697
41,023
34,611
36,940
8,890
8,452
1,086
4,083
7,370
8,578
4,913
5,719
-3,696
-2,425
-10,422
-6,062
-2,588
-2,070
25,082
31,784
1.6
1.3
29,655
31,996
31,124
40,812
28,605
33,857
245
4,513
2,764
11,468
3,509
10,458
-70.7
198.0
915
915
3.8
11.4
1.7
5.0
4.8
6.7
Source: MOSL
-9,618
30,404
7,750
68,868
46,055
42,297
17,733
3,758
3,524
2,936
-5,588
25,097
7,411
65,685
47,773
45,126
15,872
2,647
4,903
3,226
-2,588
24,568
7,984
57,764
40,941
39,996
13,625
945
3,404
2,318
235
22,813
2.9
13,865
55,003
3,600
1,419
52,822
40,585
8.1
935
43.4
25.2
17.2
-2,256
17,912
2.4
15,392
50,293
7,582
1,364
44,076
34,842
-14.2
935
37.3
17.7
12.3
-2,460
16,823
2.1
18,292
39,472
15,008
656
25,120
19,104
-45.2
915
20.9
8.8
7.3
Exhibit 8: Metal sector valuation
Rating
Steel
Tata Steel
Buy
SAIL
Neutral
JSW Steel
Buy
JSPL
Neutral
NMDC
Buy
Non-Ferrous
Hindalco
Buy
SSLT
Buy
Hindustan Zinc
Buy
Nalco
Buy
CMP=current market price
Price MCAP
EPS
(INR) (USD M) FY14E FY15E FY16E
389
74
994
154
140
152
217
176
48
6,078
4,923
3,865
2,264
8,940
5,053
10,335
11,965
2,010
35.5
4.6
38.6
20.9
16.1
12.5
17.2
16.3
2.6
25.6
6.3
95.5
9.5
17.2
13.7
20.6
20.4
5.6
56.0
5.6
81.6
3.8
14.5
15.1
18.9
18.8
6.8
P/E (x)
FY15E FY16E
15.2
11.7
10.4
16.2
8.2
11.1
10.5
8.6
8.7
6.9
13.2
12.2
40.1
9.6
10.1
11.5
9.4
7.1
EV/EBITDA (x)
FY15E FY16E
7.1
9.0
6.6
9.3
4.5
8.0
6.5
5.4
3.1
6.0
8.1
6.8
9.6
5.5
6.8
5.9
4.5
1.9
P/B(x)
FY14E FY15E
1.5
0.7
1.1
0.6
1.9
1.2
0.7
1.0
0.8
1.7
1.3
1.2
0.8
0.8
1.6
1.4
0.9
0.9
Source: MOSL
Source: MOSL, Company
4 February 2015
8

Jindal Steel & Power
Story in charts
Exhibit 9: Crude steel production set to increase..
Crude steel capacity - mt
4.3
4.9
Exhibit 10: India business EBITDA to moderate; Shadeed up
Steel EBITDA/t (Standalone)
17,733
15,872
13,625
12,600
8,890
2,936
3,226
5,217
2,318
FY14
FY15E
FY16E
FY17E
8,452
5,719
4,913
EBITDA/t of HBI (Shadeed)
2.8
3.0
3.0
3.7
FY12
FY13
FY14
FY15E
FY16E
FY17E
FY12
FY13
Source: Company, MOSL
Source: Company, MOSL
Exhibit 11: Upside risk to out pellet sales volumes as Exhibit 12: FCF could remain under pressure; variable on
domestic iron ore supply improves
results of coal auction
Pellet sales - kt
1,995
2,112
2,125
FCF - INR b
Capex - INR b
4
-2
-35
523
529
0
FY11
FY12
FY13
FY14
FY15E
FY16E
0
FY17E
FY12
FY13
-73
-60
-84
-96
-142
FY14
FY15E
FY16E
FY17E
-54-60
-33
-27
Source: Company, MOSL
Source: Company, MOSL
Exhibit 13: Trading cheap on replacement cost valuation
Source: MOSL, Company
4 February 2015
9

Jindal Steel & Power
Corporate profile: Jindal Steel & Power
Company description
Jindal Steel & Power (JSP) has steel-making
capacity of 3mtpa at Raigarh, 1.5mtpa at Angul and
2mtpa at Shadeed Oman. It has one of the best
iron ore and coal resources in India, with assets
spread over various mineral-rich countries. JSPL has
captive iron ore mines. It also has multiple coal
resources overseas, mainly in Mozambique, South
Africa, Australia and Indonesia.
Exhibit 14: Sensex rebased
Exhibit 15: Shareholding pattern (%)
Dec-14
Promoter
DII
FII
Others
61.1
3.7
19.9
15.3
Sep-14
60.5
4.5
21.4
13.6
Dec-13
59.7
4.7
21.9
13.7
Exhibit 16: Top holders
Holder Name
Morgan Stanley Asia (Singapore) Pte
HSBC Global Investment Funds A/C Hsbc Global
ICICI Prudential Life Insurance Company Ltd
% Holding
2.2
2.0
1.2
Note: FII Includes depository receipts
Exhibit 17: Top management
Name
Naveen Jindal
Savitri Jindal
Ravi Uppal
Ratan Jindal
Shallu Jindal
Designation
Chairman
Chairman Emeritus
Managing Director & CEO
Director
Director
Exhibit 18: Directors
Name
Naveen Jindal
Savitri Jindal
Ravi Uppal
Ratan Jindal
Shallu Jindal
R V Shahi*
Arun Kumar*
Arun K Purwar*
*Independent
Name
Haigreve Khaitan*
Hardip Singh wirk*
Sudershan Kumar Garg*
Rajiv Sharma
K Rajagopal
Dinesh Kumar Saraogi
Chandan Roy*
Exhibit 19: Auditors
Name
S S Kothari Mehta & Co
Ramanath Iyer & Co
Type
Statutory
Cost Auditor
Exhibit 20: MOSL forecast v/s consensus
EPS
(INR)
FY15
FY16
FY17
MOSL
forecast
13.1
3.8
11.4
Consensus
forecast
18.0
20.8
25.2
Variation
(%)
-27.2
-81.7
-54.8
4 February 2015
10

Jindal Steel & Power
Financials and valuations
Income Statement (Consolidated)
Y/E March
Net sales
Change (%)
Total Expenses
EBITDA
% of Net Sales
Depn. & Amortization
EBIT
Net Interest
Other income
PBT before EO
EO income
PBT after EO
Tax
Rate (%)
Reported PAT
Minority interests
Share of Associates
Adjusted PAT
Change (%)
Balance Sheet (Consolidated)
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Good will
Investments
Curr. Assets
Inventory
Account Receivables
Cash and Bank Balance
Loans & advances and others
Curr. Liability & Prov.
Account Payables
Provisions & Others
Net Current Assets
Appl. of Funds
E: MOSL Estimates
2010
110,915
2.2
52,331
58,584
52.8
9,970
48,614
3,576
603
45,641
-107
45,535
9,189
20.2
36,346
755
139
35,837
12.3
2011
131,122
18.2
67,960
63,162
48.2
11,510
51,652
2,596
815
49,871
49,871
11,830
23.7
38,040
659
158
37,539
4.7
2012
182,086
38.9
113,218
68,868
37.8
13,865
55,003
3,600
1,419
52,822
-936
51,886
11,863
22.9
40,023
574
200
40,585
8.1
2013
198,068
8.8
132,383
65,685
33.2
15,392
50,293
7,582
1,364
44,076
-5,741
38,335
9,218
24.0
29,116
417
402
34,842
-14.2
2014
200,040
1.0
142,276
57,764
28.9
18,292
39,472
15,008
656
25,120
0
25,120
6,182
24.6
18,938
-140
26
19,104
-45.2
2015E
210,362
5.2
147,981
62,381
29.7
27,447
34,934
25,506
1,670
11,098
-18,552
-7,454
1,037
-13.9
-8,491
-1,953
-18
11,996
-37.2
2016E
245,514
16.7
184,735
60,779
24.8
29,655
31,124
28,605
245
2,764
0
2,764
2,489
90.1
275
-2,832
402
3,509
-70.7
(INR Million)
2017E
296,433
20.7
223,626
72,808
24.6
31,996
40,812
33,857
4,513
11,468
0
11,468
3,964
34.6
7,504
-2,551
402
10,458
198.0
(INR Million)
2017E
915
213,291
214,206
3,466
458,682
14,526
690,879
641,680
211,785
429,895
122,478
5,930
3,418
268,531
70,600
27,383
37,937
132,612
139,373
63,161
76,212
129,158
690,878
2010
931
103,158
104,089
1,659
86,043
8,455
200,246
131,625
32,651
98,974
79,470
1,007
3,185
68,510
14,308
7,533
1,128
45,541
50,900
30,377
20,522
17,611
200,246
2011
934
140,169
141,103
2,335
139,728
10,055
293,221
192,756
44,321
148,435
93,809
1,018
2,979
114,648
27,734
11,537
4,640
70,737
67,668
22,736
44,933
46,980
293,221
2012
935
180,176
181,111
3,071
170,908
11,920
367,010
223,301
58,360
164,940
136,520
918
3,776
143,922
35,795
13,068
1,492
93,567
83,066
29,110
53,956
60,856
367,010
2013
935
211,588
212,523
5,573
246,182
13,365
477,642
267,032
74,285
192,747
192,303
1,543
8,089
176,046
45,242
19,541
2,001
109,262
93,084
31,360
61,724
82,962
477,642
2014
915
225,191
226,105
10,802
363,682
14,727
615,316
466,646
122,687
343,959
178,112
5,930
3,418
209,301
48,812
17,724
10,153
132,612
125,405
49,192
76,212
83,896
615,316
2015E
915
203,553
204,468
8,849
418,682
15,021
647,020
599,984
150,134
449,850
104,774
5,930
3,418
201,779
49,690
19,696
-220
132,612
118,731
42,518
76,212
83,048
647,020
2016E
915
204,948
205,863
6,017
438,682
14,716
665,278
631,734
179,789
451,945
105,623
5,930
3,418
229,572
58,951
22,370
15,639
132,612
131,212
54,999
76,212
98,361
665,278
4 February 2015
11

Jindal Steel & Power
Financials and valuations
Ratios (Consolidated)
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Payable (Days)
Work.Cap.Turnover (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Debt/Equity
E: MOSt Estimates
Cash Flow Statement (Consolidated)
Y/E March
Pre-tax profit
Depreciation
(Inc)/Dec in Wkg. Cap.
Tax paid
CF from Op. Activity
(Inc)/Dec in FA + CWIP
(Pur)/Sale of Investments
Others
CF from Inv. Activity
Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Other financing activities
CF from Fin. Activity
(Inc)/Dec in Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2010
37.9
49.7
111.8
1.3
3.4
2011
40.1
53.0
151.0
1.5
3.8
3.8
2.9
1.0
2.1
4.4
1.0
40.4
27.5
42.3
0.8
0.6
47.1
24.8
100.0
14.9
1.3
13.6
0.8
30.5
21.3
33.7
0.7
0.4
77.2
32.1
63.3
32.3
1.7
19.9
1.0
2012
43.4
57.6
193.7
1.6
3.8
3.5
2.7
0.8
1.7
4.5
1.0
25.2
17.2
26.5
0.8
0.5
71.8
26.2
58.4
32.6
1.7
15.3
0.9
2013
37.2
47.6
227.3
1.6
4.4
4.1
3.2
0.7
2.0
5.9
1.0
17.7
12.3
20.2
0.7
0.4
83.4
36.0
57.8
40.9
1.9
6.6
1.1
2014
20.9
40.7
247.1
1.6
7.9
7.4
3.8
0.6
2.5
8.6
1.0
8.8
7.3
11.4
0.4
0.3
89.1
32.3
89.8
36.9
1.7
2.6
1.6
2015E
13.1
20.7
223.5
1.6
14.3
11.7
7.4
0.7
2.7
9.0
1.0
5.6
5.8
7.3
0.4
0.3
86.2
34.2
73.8
39.6
1.7
1.4
2.0
2016E
3.8
32.7
225.0
1.6
48.8
40.1
4.7
0.7
2.3
9.3
1.0
1.7
4.8
5.8
0.4
0.4
87.6
33.3
81.8
33.7
1.7
1.1
2.1
2017E
11.4
43.2
234.1
1.6
16.4
13.5
3.6
0.7
1.9
7.7
1.0
5.0
6.7
7.7
0.5
0.4
86.9
33.7
77.8
30.8
1.9
1.2
2.0
(INR Million)
2017E
11,468
31,996
-8,499
-4,154
30,811
-26,800
0
-26,800
0
20,000
-1,713
18,287
22,298
15,639
37,937
2010
45,535
9,970
3,290
-7,905
50,890
-61,454
1,954
-1,424
-60,924
777
4,900
-1,208
4,468
-5,566
6,694
1,128
2011
49,871
11,510
-25,857
-10,230
25,294
-75,471
206
1,235
-74,031
3
53,685
-1,439
52,249
3,512
1,128
4,640
2012
51,886
13,865
-17,024
-9,999
38,728
-73,254
-797
2,525
-71,527
1
31,180
-1,529
29,651
-3,148
4,640
1,492
2013
38,335
15,392
-21,597
-7,772
24,358
-84,012
-4,312
-9,270
-97,595
0
75,274
-1,527
73,746
509
1,492
2,001
2014
25,120
18,292
7,217
-4,946
45,683
-141,525
4,670
-12,688
-149,543
-3,986
117,500
-1,503
112,011
8,152
2,001
10,153
2015E
-7,454
27,447
-9,524
-4,030
6,439
-60,000
0
-10,099
-70,099
0
55,000
-1,713
53,287
-10,373
10,153
-220
2016E
2,764
29,655
546
-2,793
30,171
-32,600
0
-32,600
0
20,000
-1,713
18,287
15,859
-220
15,639
4 February 2015
12

Jindal Steel & Power
NOTES
4 February 2015
13

Disclosures
This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company(ies) and/sector(s), if any, covered in the report and may be
distributed by it and/or its affiliated company(ies). This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does
not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not
for public distribution and has been furnished to you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal
recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider
whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as
up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a
some companies covered by our Research Department. Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or
its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this
material may educate investors on investments in such business. The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other
parties for the purpose of gathering, applying and interpreting information. Our research professionals are paid on the profitability of MOSt which may include earnings from investment banking and other business.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders,
and other professionals or affiliates may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary
trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing
among other things, may give rise to real or potential conflicts of interest. MOSt and its affiliated company(ies), their directors and employees and their relatives may; (a) from time to time, have a long or short position
in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation
or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with
respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations
made by the analyst(s) are completely independent of the views of the affiliates of MOSt even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as
such, may not match with a report on a company's fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering to different set
of customers having various objectives, risk profiles, investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or
employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of
its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is
based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions
provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or
summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to
update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way
responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time,
any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on
this report or for any necessary explanation of its contents.
Most and it’s associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any
compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.
Most and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities
mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the
report.
Motilal Oswal Securities Limited is under the process of seeking registration under SEBI (Research Analyst) Regulations, 2014.
There are no material disciplinary action that been taken by any regulatory authority impacting equity research analysis activities
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be
directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation
of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement
§
Analyst ownership of the stock
§
Served as an officer, director or employee
JINDAL STEEL & POWER
No
No
Jindal Steel & Power
Regional Disclosures (outside India)
For U.S.
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In
addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the
United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or
intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning
agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL,
and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors
Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to
accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Anosh Koppikar
Kadambari Balachandran
Email : anosh.Koppikar@motilaloswal.com
Email : kadambari.balachandran@motilaloswal.com
Contact : (+65)68189232
Contact : (+65) 68189233 / 65249115
Office Address : 21 (Suite 31),16 Collyer Quay,Singapore 04931
For Singapore
4 February 2015
Motilal Oswal Securities Ltd
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
14