Buy rating for Jindal Steel and Power

Jindal Steel and Power (JSP) is India's largest coal-based sponge iron producer and is fully integrated from iron ore and non coking coal mines to steel production. Steel capacity is 3mtpa. JSP's 340MW captive power plant feeds on recovery of waste gases and coal washery rejects. JSP has set up a 1,000MW merchant power plant under a wholly owned subsidiary. The company has rich coal resources in India and has interests in iron ore, oil & gas and coal assets in Bolivia, Georgia, and Africa.

• 1,000MW merchant power plant already set up has very strong cash flows due to cost leadership and very lucrative power rates due to the demand and supply gap in India.
  
• The total thermal power capacity will rise from 1,340MW presently to 6,000MW in 4-5 years.
• JSPL has firmed up plans to set up a 1,000MW thermal power plant in Jharkhand.