Jindal Stain. (JSL)

FairStock Score: 61/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Strong profitability: ROE 17.62% and ROCE 18.16% with moderate leverage of 0.38 D/E.
• Healthy cash generation: FCF of ₹1,285 Cr and Piotroski F-Score of 8/9.
• Impressive long-term growth: 5-year revenue CAGR of 26.39% and latest profit growth of 21.78%.
• High promoter holding of 61.22% aligns management with minority shareholders.
• Altman Z-Score of 3.16 indicates a financially stable balance sheet.

Concerns

• Valuation is rich: P/E 21.65 and P/B 3.83, with the price 82% above the Graham Number of ₹425.65.
• EV/EBITDA of 77.78 is extremely high for a cyclical steel player, implying perfection is priced in.
• Dividend yield of only 0.39% provides little downside support.
• Steel is cyclical; current profit growth may reverse sharply during a downcycle.

AI Analysis

Let me look at Jindal Stain through Graham's lens. Steel is not a wonderful business in the Buffett sense—it is capital-intensive, cyclical and a price-taker. But JSL's numbers force me to pay attention. Over five years revenue has compounded at 26.39%, latest quarter sales were ₹10,518 Cr and net profit ₹828 Cr. Profit grew 21.78% while sales grew 8.42%, so margins and efficiency are doing the heavy lifting. Return on equity is 17.62% and ROCE 18.16%, well above my threshold for a commodity producer. The balance sheet is respectable: debt/equity at 0.38, free cash flow of ₹1,285 Cr, and an Altman Z-score of 3.16 suggests low bankruptcy risk. Piotroski F-score of 8/9 confirms healthy operations. Promoter holding of 61.22% also aligns interests. Yet I cannot ignore valuation. At ₹775.60, the P/E is 21.65 and P/B is 3.83, with a dividend yield of just 0.39%. The Graham Number is ₹425.65, meaning I have no margin of safety if I apply Graham's formula; the price is nearly double that. DCF suggests ₹834.58, so there is some support, but a discounted cash flow for a cyclical steel maker is only as good as the cycle assumption. EV/EBITDA at 77.78 is alarmingly rich and tells me the market is paying for near-perfect execution. This is a good, well-managed steel company, but not a cheap one. I would watch the cycle closely: when steel prices turn, profits and the multiple can compress together. For a retail investor, JSL deserves a place only in a diversified portfolio, and only if you can stomach cyclicality. I would wait for a larger margin of safety.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer