Jindal Steel Limited has entered a critical inflection point where long-term capacity expansion, improving balance-sheet metrics, and a confirmed technical breakout are beginning to align. While near-term profitability has faced pressure due to higher operating costs and planned maintenance, the company’s strategic investments at Angul, rising share of value-added products, and improving raw-material integration are expected to restore margins over the coming quarters. Geojit Investments maintains a BUY stance, citing a favourable risk–reward setup supported by a bullish chart pattern and improving medium-term fundamentals. With steelmaking capacity rising sharply and leverage metrics improving, Jindal Steel appears positioned to participate meaningfully in India’s infrastructure-led growth cycle over the next three to six months.

Research House View: Geojit Initiates BUY on Jindal Steel

Geojit Investments Ltd. has recommended a BUY on Jindal Steel Ltd. with a medium-term investment horizon of three to six months.
The brokerage believes the stock offers an attractive entry opportunity following a technical breakout, supported by structural capacity additions and a gradual recovery in operating metrics. The recommendation comes despite a softer Q2FY26 performance, which Geojit views as transitory rather than structural.

Business Profile: A Strategic Player in India’s Steel and Infrastructure Push

Founded in 1979 and headquartered in New Delhi, Jindal Steel Ltd. is among India’s leading integrated steel producers, with operations spanning Raigarh in Chhattisgarh, Angul and Barbil in Odisha, and Patratu in Jharkhand. The company manufactures rails, plates, rebars, wire rods, and flat steel products, catering to infrastructure, energy, and industrial demand.

Jindal Steel holds a strategic monopoly as the only private manufacturer of railway rails in India, a positioning advantage that strengthens its relevance amid the government’s sustained focus on railway and infrastructure investments. Its early adoption of technologies such as the MXCOL plant, which enables steelmaking using high-ash coal, further enhances operational resilience.

Quarterly Performance: Margins Dip, But Volumes Stay Resilient

In Q2FY26, Jindal Steel reported revenue of Rs.11,685.9 crore, marking a year-on-year increase of approximately 4 percent, driven by steady steel demand. However, operating profitability softened.

EBITDA declined to Rs.2,081 crore, with margins compressing to 17.8 percent, down 181 basis points year-on-year. The decline was largely attributed to higher operating expenses stemming from planned maintenance shutdowns and increased metallic purchases. As a result, profit after tax fell 26 percent year-on-year to Rs.635 crore.

Geojit notes that these pressures were largely one-off in nature and expects margins to normalise as new capacities ramp up and cost efficiencies improve.

Capacity Expansion: Angul Becomes the Growth Engine

A key highlight of the quarter was the commissioning of India’s second-largest blast furnace along with a 3 MTPA Basic Oxygen Furnace at the Angul facility.

This expansion has lifted Jindal Steel’s total steelmaking capacity to 12.6 MTPA, with the company firmly on track to reach 15.6 MTPA by FY26. The Angul complex is expected to play a central role in driving volume growth, operating leverage, and product diversification over the medium term.

Geojit believes that the scale and timing of this expansion place Jindal Steel in a strong position to benefit from an upcycle in domestic steel demand.

Operational Levers: Value-Added Products and Raw-Material Integration

Despite near-term earnings pressure, management has reiterated confidence in margin recovery, supported by multiple structural levers.

Value-added and flat steel products now account for 73 percent of total sales, enhancing pricing power and earnings stability. In parallel, captive iron-ore usage has risen sharply from 29 percent to 45 percent, reducing exposure to volatile raw-material prices.

Geojit expects these factors, combined with stabilising steel prices, to translate into improved EBITDA margins in the coming quarters.

Balance Sheet Strength: Leverage Metrics Continue to Improve

Jindal Steel has demonstrated disciplined capital management even amid aggressive capacity expansion.

Net debt declined to Rs.14,156 crore in Q2FY26, while net debt-to-EBITDA improved to a comfortable 1.48x. This reduction in leverage provides financial flexibility and limits downside risk during periods of market volatility.

The brokerage views the improving balance-sheet profile as a critical support for valuation re-rating over the medium term.

Valuation Perspective: Premium Justified by Growth Visibility

At current levels, Jindal Steel is trading at a one-year forward EV/EBITDA multiple of 8.2x, approximately 12 percent above its three-year average of 7.3x.

Geojit believes this premium is justified, given the company’s aggressive capacity expansion, rising contribution from value-added products, improved raw-material security, and strengthening financial discipline. As operating leverage kicks in, forward valuations are expected to compress meaningfully.

Technical Structure: Cup-With-Handle Signals Trend Reversal

From a technical standpoint, the stock has completed a classic Cup-with-Handle formation on daily charts, accompanied by a confirmed breakout above a downward trendline.

This pattern signals a structural shift toward higher highs and sustained bullish continuation. The stock is trading firmly above all key moving averages, indicating strong trend alignment and improving market participation.

Momentum indicators reinforce the bullish setup, with the Relative Strength Index hovering near 52 and the MACD registering a positive crossover above the zero line.

Trading Strategy: Defined Levels Offer Attractive Risk–Reward

Geojit recommends initiating long positions in Jindal Steel within a defined accumulation zone.

BUY range: Rs.1,050 – Rs.1,080
Target price: Rs.1,290
Stop loss: Rs.939

At the current market price of around Rs.1,042, the setup offers a potential upside of approximately 24 percent, supported by both technical momentum and improving fundamentals.

Financial Snapshot: Growth Visibility Improves Sharply

The sharp improvement projected beyond FY26 underscores the operating leverage embedded in the expanded capacity base.

Investor Takeaway: A Confluence of Fundamentals and Technicals

Jindal Steel’s near-term earnings volatility masks a deeper structural transformation underway. With capacity expansion nearing completion, balance-sheet metrics improving, and technical charts signalling trend reversal, the stock offers a compelling tactical opportunity.

Geojit’s BUY call reflects confidence that the company is entering a phase where volumes, margins, and valuations can move in tandem, making Jindal Steel a notable candidate within India’s metals and infrastructure ecosystem.