Jindal Stainless Company Details Report

Jindal Stainless Ltd is one of the largest manufacturers of Stainless Steel flat products, in Austenitic, Ferritic, Martensitic and Duplex grades in India used in a variety of industries like automobile, railways, construction, consumer goods etc.

Products and Applications

The Co is the largest manufacturer of stainless steel in 200, 300, 400 and duplex stainless steel series. The product range includes Ferro Alloys, Steel Slabs, Hot Rolled Coils, Cold Rolled Coils, Steel Plates etc.

Applications:
Architecture,Building & Construction - Roofing, Cladding, Paneling
Automobile and Transport - Exhaust, Brakes, Fuel Tanks
Railway - Coaches, Wagons, Metro
Consumer Durables - Kitchen applications, bathroom accessories
Process industry - Boilers, Water tanks, Pumps for the food and chemical industry

Strategic expansions to propel growth:

 JSL is investing INR57b to expand its upstream capacity, enhance downstream operations and diversify its product mix via 1.2mtpa steel metal shop (SMS) JV in Indonesia, which will increase its total capacity by 40% to 4.2mtpa by FY27E.  JSL is expanding its downstream operation in Jajpur and has acquired JUSL (hot 3.2mtpa and cold 0.2mtpa rolling capacity) to cater to 1.2mtpa incremental upstream capacity in Indonesia JV.  For product diversification, JSL has acquired Rathi Super Steel (RSSL) and Rabirun Vinimay (RVPL) to cater to infra demand. It has also acquired Chromeni Steels (0.6mtpa with plan to expand till 4mtpa) to increase CR share to 75% (vs. 45% currently)

Focus on cost savings via backward integration:

 Nickel accounts for ~50% of its input costs, making it a critical raw material for stainless steel (SS) production. India lacks domestic reserves and mainly relies on imports (ferronickel/SS scrap).  JSL has entered into a JV with New Yaking Pte Ltd for a nickel pig iron (NPI) smelter in Indonesia (49% stake) to secure long-term supply. This will ensure annual supply of 0.2mt NPI with 14% nickel content and reduce its exposure to nickel price fluctuations.

Downstream acquisition to support incremental melt capacity

 Jajpur capacity: To accommodate the increase in melting capacity, JSL plans to invest ~INR19b in downstream (CRAP/HRAP) capacity expansion at its existing capacity in Jajpur. In addition, INR12b will be spent on upgrading infrastructural facilities, railway siding, and sustainability-related projects like renewable energy.  Integrating JUSL operations: JSL acquired 74% of JUSL for a cash consideration of INR9.6b, making it a 100% owned subsidiary. JUSL operates a 3.2mtpa hot strip mill and a 0.2mtpa cold rolling mill, expanding JSL’s downstream capacity and catering to the incremental melting capacity.  Product diversification strategy via acquisition of RSSL and RVPL: JSL is predominantly a flat steel manufactured with limited exposure to the infra sector (~3-5%). However, with the acquisition of RSS and RVPL, the company aims to increase its operations in the infra space, which contributes ~20% of India’s total SS demand. RSSL is currently operating at 75% utilization, focusing on rebar with rolling capacity of 0.16mtpa. The company plans to reach 0.20mtpa in the next two to three years. RVPL has a downstream capacity of 50ktpa for pipes and tubes with an expansion potential of up to 250ktpa. Currently, the RVPL facility is being used for polished VAPs.

Strategic expansion to strengthen global leadership
JSL’s three-pronged investment strategy, totaling INR57b, focuses on capacity expansion, downstream enhancement, and diversification: The investment (~INR57b) will increase the consol. installed capacity by 40% to ~4.2mtpa by FY27 from ~3mtpa currently. With the completion of ongoing capex, JSL is set to become one of the top five SS manufacturers globally. A) Indonesia JV a low-cost investment vs. greenfield expansion  JSL has entered into a JV to set up and operate a 1.2mtpa SMS in Indonesia, which is progressing well and expected to be commissioned by mid-FY26. This will increase JSL’s total melting capacity by 40% to 4.2mtpa. The total capex outlay is expected to be ~INR14.5b, with JSL’s share at ~INR7.1b, which translates into ~USD143/t as compared to global average of ~USD220-230/t for an equivalent greenfield expansion globally.

Volume growth with enhanced margins to drive earnings

 The merger with promoter holding company, strategic JVs, and acquisition of key assets have resulted in increased capacity, enhanced backward integration, and downstream product diversification/value addition.  We believe these measures will help JSL deliver a 10% CAGR in volumes and 4% CAGR in NSR over FY25-27, driving a similar 14% CAGR in revenue. With a better cost structure and higher share of value-added products (VAP), we anticipate EBITDA/t of INR20,500 to INR22,000 over FY26-27E.  With stable capex intensity and healthy OCF of INR62b during FY26-27E, we believe JSL’s net debt will remain at a comfortable level and JSL would comfortably fund the ongoing capex.

Valuation and view

 The SS industry is poised for strong growth as India’s SS consumption is expected to reach 7.3mt by FY31 and 12.5-20mt by 2047, backed by rising adaptability across sectors like infrastructure projects, manufacturing, automotive, consumer durables, and growing new-age sector. We believe JSL is well placed to realize this robust demand outlook, with higher VAP supporting margins.  From being solely a flat SS producer to a diversified long SS player, JSL has expanded into rebar, wire rods, and others, unlocking significant infrastructure opportunities. Additionally, its focus on value-added CR SS has strengthened its position in both domestic and export markets.

Jindal Stainless Limited 570-670
Expected level 860
Support 500

4300+💥Long term level hit

2782🚀Long term level hit Jackpot

Good morning

Bajaj Auto Limited company details report

Bajaj Auto Limited is the world’s leading manufacturer & seller of motorcycle, three-wheeler & quadricycle. The company holds a market share of 18% in the motorcycle segment (Source: Siam). Till date, it exports to over 90 countries. The company operates manufacturing plants in Waluj, Chakan, and Pantnagar, with a total annual capacity of 71.1 lakh units, including 9.3 lakh commercial vehicles. Towards, the two-wheeler space, in the 100-110cc segment, the company holds a 10% market share with its CT and Platina brands. In the 125cc and above category, which includes Pulsars, Dominars, KTMs, Husqvarnas, Avengers, and Triumphs, it commands a 24% market share. Following years of collaboration, Bajaj Auto launched two new Triumph models, the Speed400 and Scrambler400X. These modern classics cater to the large bike segment. The distribution network for Triumph in India has expanded to 78 showrooms across 56 cities. Bajaj Auto's Probiking division focuses on KTM and Husqvarna motorcycles, offering models in 125cc, 200cc, 250cc, and 390cc categories nationwide. It has reintroduced its scooter as an electric vehicle under the Chetak brand, now available across over 4,000 touch points. In the electric vehicle space, the company’s portfolio includes four models: Chetak 3501, Chetak 3502, Chetak 3503 and Chetak 2903. In the three wheeler space, the company continues to enjoy by far the dominant market share in ICE category. It recently introduced electric three wheelers in passenger and good carrier segment. Electric three wheelers is currently sold in over 60 cities in India. BACL (Bajaj Auto Credit Limited) received RBI’s certificate to operate as NBFC in Aug 2023, and thereby it commenced business on 1st January 2024. The company has two Indian subsidiaries, viz. Chetak Technology Ltd. and Bajaj Auto Credit Ltd. and five overseas subsidiaries, viz. PT Bajaj Auto Indonesia, Bajaj Auto International Holdings BV, Netherlands, Bajaj Auto (Thailand), Bajaj Auto Spain, S.L.U. and in Spain.

Revenue mix

Sales Volume year wise

#SALES #GROWTH

In FY25, the net sales was ₹50,995 cr and increased by 13.7% YoY. It sold 39.8 lakh units of two wheelers (23.1 lakh units in domestic an increase of 3% YoY and 16.7 lakh units in export market and rose by 13% YoY) and 6.7 lakh units of commercial vehicles (4.8 lakh units in domestic market and grew by 3% YoY and 1.9 lakh units in export market and expanded by 19% YoY). Revenue from exports grew by ~8% YoY. On a YoY basis, Chetak (EV) recorded revenue of ~₹5,500 cr and saw an increase of ~900 bps in its market share. In FY24, the net sales of the company was reported at ₹44,870 cr (of which exports was ₹14,575 cr) a rise of 23% majorly attributed to robust domestic sale in two-wheelers and three wheelers. Two wheelers (domestic) posted sale of 22.5 lakh units (~24% increase) followed by three-wheelers sale of 4.6 lakh units. Exports de-grew by 10% for twowheelers to 14.8 lakh units and by 11% YoY for threewheelers to 1.6 lakh units. Chetak sales was ~1.2 lakh units.

#EBITDA #GROWTH 5 Year CAGR15.5%

In FY25, the EBITDA was ₹10,468 cr and grew by 19.5% YoY. This was led by better product mix, favorable raw material cost, improved dollar realization and operating leverage benefits. Bajaj Auto demonstrated an EBITDA increase of 35.8% YoY and stood at ₹8,762 cr in FY24. This rise was owing to softening of raw material prices, better product mix and operating leverage benefits. Besides, there were certain cost control measures adopted by the company which augured well for EBITDA growth as well.

#PAT #GROWTH 5 Year CAGR 11.0%

In FY25, the net profit was ₹8,240 cr and grew by 11% YoY. Taking into consideration, the share of profit or associate of KTM, the net profit was ₹7,325 cr and declined by 5% YoY. This was due to KTM's challenges became more pronounced in FY24. It reported weaker results marked by declining profits, rising costs, and elevated inventory levels across key markets. Once grappling with supply constraints now it is facing excess unsold two-wheelers. During Q4 FY25, it reported a ₹335 cr net loss from its investment in associate Pierer Bajaj AG, including an impairment related to KTM AG's restructuringimpacting quarterly performance despite strong operational results. Additionally, a one-time deferred tax provision of ₹211 crore was recorded in FY25 due to changes in the tax treatment of debt mutual funds, affecting post-tax earnings. In FY24, the net profit was at ₹7,441 cr and expanded by 34.5% YoY.

#EBITDA #MARGIN

In FY25, the EBITDA margin was 20.5% and grew by ~100 bps YoY, despite the EV segment not being profitable yet and being a considerable contributor to revenue. This was also backed by favourable raw material cost and operating leverage benefits. In FY24, the EBITDA margin was 19.5% v/s 17.7% in FY23. The increase was led by better product mix (domestic two wheelers & three wheelers); stabilized raw material cost and operating leverage benefits.

#PAT #MARGIN

In FY25, the PAT margin was 16.2% and de-grew by 42 bps on account of higher finance cost and lower other income. Including the consideration of share of profit/associates, the PAT margin declined by 282 bps YoY to 14.4% as its associate company PBAG registered loss for the year, thereby impacting margins. In FY24, the PAT margin increased to 16.6% from 15.2% in FY23.

ROCE

In FY25, the ROCE declined owing to increase in capital employed, mostly related to investments in subsidiaries and EV. The company executed buyback of 40,00,000 equity shares (on a proportionate basis comprising 1.41% of the total paid up equity shares) at ₹10,000/share which was concluded on 26th Mar 2024. Number of shares pre-buyback (as on record date) was 28.3 cr shares and post-buyback it was 27.9 cr shares.

MANAGEMENT Niraj Bajaj's career spans more than 35 years and he is currently serving as the Chairman of Bajaj Auto since 1st May 2021. Niraj Bajaj is on the Board of Directors of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited and is the Chairman of Bachhraj & Company, Jamnalal Sons, and various other Bajaj Group companies. Rakesh Sharma, Whole-time Director of the company, whose five-year term would be expiring on 31st December 2023, has been re-appointed for a further period of 5 years w.e.f. 1st January 2024, subject to approval of the shareholders of the company. Shri Abraham Joseph, who was holding the position of the Chief Technology Officer up to 31st March 2024, and part of Senior Management Personnel of the Company, has been appointed as the Managing Director of Chetak Technology Limited.