Jindal Steel & Power share price gains 3%: 2 key reasons why analysts expect 12-16% upside for the stock

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Jindal Steel & Power share price gained more than 3% in intraday trades on Wednesday. The Jindal Steel share price that is up almost 32% since 1st November and also scaled 52-week highs in February itself. Jindal Steel had impressed with the December quarter performance as its net profits more than doubled over the year-ago quarter.

While the net realizations remained firm and volume growth was decent, declining input costs had helped. The analysts had maintained strong outlook for Jindal Steel looking at- (1)its focus on raw material integration and (2) ongoing capacity expansions driving growth outlook. Jindal Steel had commissioned the Gare Palma IV/6 coal mine and was able to achieved a production of 1mt (million tonne) during Q3.

Jindal Steel also commenced production from Utkal C coal block and is gradually ramping up and these mines will drive coal supply security over time. Notably Jindal Steel's Australian coal mines already provide natural hedge against volatility in coal prices. Meanwhile it is the ongoing capacity expansions that keep analysts upbeat on the outlook.

Also Read- Jefferies downgrades Biocon to ‘underperform’, sees 11% downside; here's why The analysts at Motilal Oswal Financial Services in their recent report said that the ongoing capacity expansion at Angul (Odisha) will significantly enhance Jindal Steel and Power’s crude steel capacity by over 65% to 15.9mt. The planned expansion, which is expected to be completed by 3QFY26, will catapult Jindal Steel and Power as fourth largest steel manufacturer in India. As these expansions will help drive its volume growth, they will also help reduce structural costs.