Technical Report on Jindal Steel & Power Ltd by Shyam Advisory

Jindal Steel & Power Ltd is one of the India’s leading steel producers with
significant presence in sectors like mining and power generation. The group has
global presence through subsidiaries, mainly in Australia, Botswana, Indonesia,
Mauritius, Mozambique, Madagascar, Namibia, South Africa, Tanzania and Zambia
KEY POINTS
Product Portfolio
The company offers a wide range of steel products which include plates & coils,
wire rod & TMT rebar, track rails and structural steel products such as beams and
columns, channels, angles, etc.
It is a preferred supplier for speciality rail products to the Indian Railways and
various metro projects in the country.
Production Volumes
It produced 4 Million tonnes of steel in FY18, 5.6 MnT in FY19, 6.3 MnT in FY20
and 7.5 MnT in FY21.
Revenue Breakup
Geography Wise :-
Domestic – 65%
Export – 35%
Product-Mix Wise :-
Flats – 73%
Longs – 27%
Industry Wise :-
Infrastructure & Construction – 75%
General Engineering – 13%
Railways – 5%
Automotive – 4%
Capital Goods – 3%
Revenue Share from Value-added Products
In FY21, the company derived 66% of its sales from value-added high margin
products up from 55% in FY18 which helps in higher margins and profitability.
Customer Base
The company has a well-diversified customer base with top 10 customers
contributing only 10% revenues in FY21. 88% of its sales are directly to
institutional customers and rest 12% is to various retail customers.[4]

Manufacturing Facilities
Presently, the company has 3 steel-making facilities in East India with a total
capacity of 9.6 Million tonnes p.a. (MnTPA):-
Angul, Odisha – 5 MnTPA
Raigarh, Chhattisgarh – 3.6 MnTPA
Patratu, Jharkhand – 1 MnTPA
It also owns a iron pellet plant with capacity of 9 MnTPA in Odisha.
Strategic Location -The steel plants are strategically located in iron-ore rich
regions and are also located in a close proximity to ports to easily source coking coal
requirements from overseas.
Capacity Expansion
The company has set a target to reach 16 MnTPA of steel making capacity by
FY25.
It plans to reach this capacity by expanding its Angul Steel Plant and setting up a
pellet capacity at its Angul Plant with a total CAPEX amount of 18,000 crores by
FY25-26.
Raw-Material Linkages
As per FY21, the company has a domestic iron ore capacity of 3.1 MnTPA.
The company only has moderate raw material linkages as only 1/5th of its total
iron requirement is met by its captive mines. It also relies on imports for meeting
coking coal requirement while thermal coal requirement is met partially through
linkage coal and rest through e-auctions and imports.
Overseas Operations
The company has global operations in South Africa, Botswana, Mozambique,
Namibia, Indonesia and Australia.
It has significant debt on these operations and they generate weak cash-flows for the
group.[2]
Sale of Oman Operations
In FY21, The company sold its entire stake in Jindal Shadeed Iron & Steel LLC,
Oman to Vulcan Steel and Templar Investments for a consideration of 1,850 crores.
The sale resulted in a loss of 1,600 crores to the company.
Plans to Divest Jindal Power
In FY21, the board approved the divestment of Jindal Power Ltd to Worldone Pvt
Ltd (a promoter company) for a consideration of 7,400 crores comprising of 3,000
crores of cash and 4,400 crores of takeover of liabilities of Jindal Steel & Power by

Jindal Power which includes inter-corporate deposits and capital advances paid by
Jindal Power to the company.
It owns and operates 2 Thermal Power Projects in Tamnar, Chhattisgarh with a
total capacity of 3,400 MW.
Reduction in Debt
It is focusing on deleveraging the balance sheet by achieving goal of 15,000 crore
net debt and eventual goal to become a net debt free company in the future.

Technical View: Jindalsteel, Structured Formation on daily chart looks positive.
Stock had a classical pennant pattern breakout with strong Bullish candle on daily
chart.
Volume analysis: – 1 Day Delivery volume Increase by 63.05% over 5 day average,
However; 1 Month: Delivery volume increase by 8.85% , hence; We recommend
BUY signal for this share . Buying can only possible above 490 for Target 558,
Target 600, Use Strict stop loss 430.
Moving Averages: -Jindal Steel & Power Ltd. is trading higher than 5 day, 20 day,
50 day, 100 day and 200 day moving averages.
5 Day 443.29 50 Day 408.22 200 Day 400.05
20 Day 421.96 100 Day 402.03

Shareholding pattern:-

The Promoter holdings have decreased. The proportion of Promoter pledged
shares has increased by 0.6049%

Key Ratio:-