金达尔不锈钢（JDSL）：不锈钢泰坦

Equity ResearchMay 28, 2025Sagar Sahu, CFA * | Equity Analyst+91 22 4224 6119 | ssahu@jefferies.comNitij Mangal * | Equity Analyst91 22 4224 6124 | nmangal@jefferies.comTommaso Castello ^ | Equity Analyst+44 (0)20 7548 4423 | tcastello@jefferies.comCole Hathorn, CFA ^ | Equity Analyst44 (0) 20 7029 8520 | chathorn@jefferies.comINR649.55^INR800 | +23%INR848.00 - INR497.00FLOAT (%) | ADV MM (USD)34.8% | 8.18INR534.9B | $6.3BJDSL IN^Prior trading day's closing price unless otherwiseJEF vs CONS20262027-7%-8%-8%-7%Q4FY--36.20Exhibit 1 - Expect 21% EPS CAGR over2117EPSROEExhibit 2 - China spread at a 10-year lowSource: Bloomberg, Jefferies. Note: China spread calculatedas difference of blended stainless steel export price over 2026E2027E2028E436,352488,943547,82752,567.261,829.967,903.229,807.737,046.842,386.236.2044.9951.47 Table of ContentsExecutive summaryInvestment thesis in chartsIndia's largest stainless steel producerIndia growing ~2x global rate with long runwayGlobal industry dominated by ChinaChina spread at a 10-year lowEmbarked on the next phase of growthStrong growth outlookShining brighter than carbon steelInitiate with BuyAppendix 1: What is stainless steelAppendix 2: Management profileAppendix 3: History of Corporate RestructuringPlease see important disclosure information on pages 27 - 32 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. The Long View: Jindal StainlessInvestment Thesis / Where We Differ•We like JDSL given its leadership position in the fast-growing India SSmarket; it has lower EBITDA/t volatility and better balance sheet vs Indiancarbon steel players.•JDSL's profitability is correlated with China SS price spread over keyinputs of nickel and ferrochrome. China spread remains ~30% belowlong-term average but can expand, especially if China macro improves.Base Case,INR800, +23%•Dispatches of 2.6mt/2.8mt in FY26-27E.•Standalone EBITDA/ton of$200/$215 inFY26E/27E.•EBITDA to rise to Rs53bn/Rs62bn inFY26E/27E.•PT of Rs800 based on FY27E EV/EBITDAmultiple of 11x.Sustainability MattersTop Material Issue(s): 1)Emissions: With a rising focus on decarbonization globally, emissions area key ESG metric for JDSL.2)Energy management: Metal production is usually an energy-intensiveprocess, with energy accounting for a large portion of cash costs.3)Factors such as human rights &community relations, air quality, and employee health & safety are other important ESG metrics.Company Target(s): 1)JDSL has committed to net zero carbon emissions by 2050.2)Mid termtarget is ~50% reduction in carbon emission by 2035 compared to baseline figures of FY22.3)JDSL has committed to meeting incremental power requirement through renewable sources.4)JDSLis committed to zero harm to employees and contractual partners, and in improvement in safetymeasuring parameters.Qs to Mgmt: 1)How is JDSL planning to achieve its targets for reduction in CO2 emission? What isthe capex requirement for this transition?2)How is JDSL supporting the local communities?3)Whatis the share of renewable in the energy mix and how will this change in coming years?ESG Sector Integration: India MetalsPlease see important disclosure information on pages 27 - 32 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,INR910, +40%•FY26-27 volumes inline with base case.•FY26-27E EBITDA/ton 14-15%higher thanbase case.•FY26-27 EBITDA 12-13% higher than basecase.•PT of Rs910 based on FY27E EV/EBITDAmultiple of 11x. Downside Scenario,INR555, -15%•FY26-27 volumes 5-10%lower than basecase.•FY26-27E EBITDA/ton 16% lower than basecase.•FY26-27 EBITDA 17-20%lower than basecase.•PT of Rs555 based on FY27E EV/EBITDAmultiple of 10x.Catalysts•Strong demand growth in India•Demand recovery in export markets•China spread recovery 3 Executive summaryIndia is the second-largest consumer of stainless steel (SS) globally and is also among thefastest-growing markets for SS with growth rate ~2x of global in last 5 years. India SS demandhas grown at 8% CAGR over the last 15 years, which is 1.3x of real GDP growth. Despite this stronggrowth over last 15 years, India's per capita SS consumption still remains at 2.8kg, which is ~50%of global average and just ~15-30% of US & China. This disparity underlines the significant gapin SS usage in India, presenting a large headroom of growth ahead. We expect JDSL to be a keybeneficiary of this growth, given its dominant ~40% market share. Elevated imports from Chinaamid weak global demand pose some near-term risk for JDSL; however, any anti-dumping dutiesin India, and potential demand recovery globally can alleviate impact.India SS market is also premiumizing with share of lower value added segment, such as consumerdurables that primarily uses commodity-grade SS, coming down from 80% in 1998 to 57% in 2015and further down to 43% in 2023. JDSL has a larger exposure to higher value added segmentssuch as