Jindal cuts net debt by 15% from peak

Led by strong operating cash flow (OCF) generation, lower capex and sharp increase in customer advances/statutory dues, Jindal Steel & Power’s net debt fell to `39,100 crore. Statutory dues (on days’ basis to sales) reached to 25 days which as significantly higher, compared to its peers. Net debt has fallen by 15 per cent from peak level of `46,000 crore in FY16. Led by stable earnings and lean capex, the broking house expects net debt to fall by 16 per cent or `6,200 crore in FY19-FY21E to `32,900 crore. Consolidated EBITDA grew 30 per cent YoY to `84,000 crore in FY19. The entire growth came from domestic steel operations. The broking house expects its share to remain between 15 to 16 per cent due to low PLF and shortage of coal. Oman based Shadeed steel operation EBITDA fell 18 per cent to $180 million due to weaker prices. In spite of tight liquidity, JSP delivered on both new capacity and debt reduction. The broking house gives accumulate tag.

Broking firm: Prabhudas Lilladher Rating: Accumulate Closing Price: `108.80