Jindal Steel & Power Stock Price Analysis

INCOME STATEMENT:
The operating profit of the company increased by 112% during the FY 2020-21. There was
an increase by 25% in the gross revenue. The operational production increased by 19%
during the financial year. There was a reduction in the finance cost by 17%.
Operational income increased 41.3 percent year on year (YoY) throughout the year.
During the fiscal year, the company's operational profit grew by 29.9 percent year on year.
Operating profit margins fell to 21.3 percent in FY21 from 23.1 percent the previous year.
Depreciation expense climbed by 41.1 percent year on year, while finance expenses increased
by 10.3 percent. Other revenue increased by 435.2 percent year on year. The year's net profit
fell by 133.8 percent year on year. During the year, net profit margins increased from 5.8
percent in FY20 to 1.4 percent in FY21.
BALANCE SHEET:
The company's current liabilities were Rs 214 billion in FY21, up from Rs 195 billion in
FY20, representing a 10.0 percent rise. Long-term debt has decreased by 9.2 percent to Rs
299 billion from Rs 330 billion in FY18. In FY21, current assets decreased by 0% to Rs 143
billion, while fixed assets increased by 4% to Rs 670 billion. Overall, total assets and
liabilities for FY21 amounted at Rs 896 billion, up from Rs 892 billion in FY20, representing
a 0% increase.
CASH FLOW ANALYSIS:
JSPL's cash flow from operating activities (CFO) was Rs 90 billion in FY19, an increase of
16.9 percent year on year. On a year-on-year basis, cash flow from investment activities
(CFI) was Rs -8 billion in FY21. On a year-on-year basis, cash flow from financial operations
(CFF) was Rs -83 billion in FY21. Overall, net cash flows for the firm during FY21 were Rs -
666 million, compared to Rs 174 million in FY20.
CURRENT VALUATION:
The company's trailing twelve-month profits per share (EPS) are Rs 5.6, an increase over the
Rs -16.7 achieved prior year. At the present price of Rs 97.9, the price to earnings (P/E) ratio
is -3.5 times the trailing twelve months earnings. At present prices, the price to book value
(P/BV) ratio is 0.6 times, while the price to sales ratio is 0.5 times. The price to cash
flow ratio of the firm was 1.5 times its end-of-year operational cash flow results.

RATIO ANALYSIS:
a) Solvency ratio:
-Current ratio: The company's current ratio decreased to 0.7x in FY19, down from
0.7x in FY18. The current ratio assesses a company's capacity to meet both short-
and long-term obligations.
-Interest coverage ratio: The company's interest coverage ratio increased to 0.7x in
FY19, up from 0.7x in FY18. A company's interest coverage ratio indicates how
readily it can pay its interest expense on existing debt. It is desirable to have a
greater ratio.
b) Profitability ratio:
-Return on equity: The company's ROE increased to 1.7 percent in FY19, up from
-5.3 percent the previous year. The ROE evaluates a company's capacity to make
returns from its shareholders' money.
-Return on capital employed: The company's ROCE increased to 7.1 per cent in
fiscal year 2019, up from 3.2 per cent in fiscal year 2018. The ROCE assesses a
company's capacity to create profits from its total capital (shareholder capital +
loan capital) utilized in the business.
-Return on assets: The company's ROA increased to 5.4 per cent in fiscal year
2019, up from 2.5 percent in fiscal year 2018. The return on assets (ROA)
evaluates how well a firm utilises its assets to produce earnings.
SHAREHOLDING PATTERN OF JINDAL:
The overall promoters' share in JINDAL STEEL & POWER remained constant at 60.47 per
cent for the quarter ended June 2021. Meanwhile, mutual funds reduced their holdings by
1.41 per cent. Mutual funds owned 12.36 per cent of JINDAL STEEL & POWER as of June
2021. Overall, institutional holdings in JINDAL STEEL & POWER fell by 2.14 per cent to
25.77 per cent in June 2021.
JINDAL STEEL & POWER's share price has risen from Rs 186.8 to Rs 417.0 in the previous
year, representing a gain of Rs 230.3 or almost 123.3 per cent.
CONSOLIDATED PRODUCTION HIGHLIGHTS: