For the January-March quarter (Q4FY20), JSPL reported a better-than-expected consolidated net profit at Rs 306 crore, against loss of Rs 219 crore in the year-ago quarter. EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin expanded 500 basis points to 25 per cent from 20.0 per cent in the previous year quarter.
Going ahead, analysts at Edelweiss Securities expect JSPL to maintain an edge over peers owing to low-cost iron ore from the Sarda mines; benefits of lower coal cost for the power division; and longs’ potentially better showing than flats. However, a delay in restructuring the Australian mining division remains a key risk.
“We reiterate JSPL holds good value as cost efficiencies and low capex intensity are expected to aid cash conservation in the ongoing difficult times. We will keep close tabs on the developments regarding the Australian subsidiary,” the brokerage firm said. However, the stock was trading above the 12-month target price of Rs 135 per share.