JSPL - Trading At Lower Than Bankruptcy Value: Centrum Broking
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Centrum Broking Report
Jindal Steel and Power Ltd.’s current enterprise value is near to what it used to be when it was on the verge of bankruptcy in December 2016.
Investors appear to have ignored the structural changes in the last five years – cost reduction, high volume base, future growth, no risk of bankruptcy amid near-term macro weakness.
JSPL has strengthened its balance sheet, with net debt/Ebitda of 0.2 times in FY22E versus 10.4 times in FY17, eliminating the risk of bankruptcy in the foreseeable future.
The benefits of ongoing capacity expansion via internal accruals are yet to be factored in.
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