Jindal Steel shares fell from record high on Q1 earnings; what’s next?

Shares of Jindal Steel and Power Ltd have delivered multibagger returns for shareholders in the last three years. Jindal Steel shares, which stood at Rs 212.05 on August 14, 2020, closed at Rs 662.25 on August 14 this year, clocking 212.31% returns during the period. During a period of two years and one year, the stock climbed 56.15% and 63.76%, respectively. In comparison, Sensex has zoomed 72.67% in three years.

The stock of the energy firm hit a record high of Rs 700 on August 11, 2023 and a 52 week low of Rs 377.05 on August 23, 2022.

Jindal Steel shares fell off their record high in the last session after net profit in Q1 slipped 15% led by a rise in expenses and fall in steel prices. The earnings were announced after market hours on August 11.

Consolidated profit fell to Rs 1692 crore in the three months ended June 30 from Rs 1990 crore a year earlier.

Revenue slipped to Rs 12,643 crore in Q1 of this fiscal against Rs 13,069 crore in the June quarter of last fiscal. Operating profit or EBITDA slipped to Rs 2628 crore in the June 2023 quarter against Rs 3438 crore in Q1 the previous fiscal.

The large cap stock ended 5.18% lower at Rs 662.25 in the previous session. Market cap of Jindal Steel slipped to Rs 67,555 crore. JSPL stock has gained 11.56 per cent since the beginning of this year and risen 12.27 per cent in six months.

In terms of technicals, the relative strength index (RSI) of Jindal Steel stands at 55.5, signaling the stock is neither oversold nor overbought. The stock has a one-year beta of 1.5, indicating very high volatility during the period. Jindal Steel stock is trading higher than the 20 day, 50 day, 100 day and 200 day but lower than the 5 day and 10 day moving averages.

A total of 1.76 lakh shares of the firm changed hands amounting to a turnover of Rs 11.78 crore on BSE.

Progressive Shares expects the stock to reach Rs 825 mark on the basis of technical analysis.

“The stock has given a breakout from a Flag and Pole Formation. Breakout in the RSI oscillator supports price activity. ADX at 30 indicates the presence of a strong uptrend. As per Flag and Pole formation, the target comes to Rs 825. One can add the stock on declines up to Rs 640,” said the brokerage.

Riches Vanara, Technical and Derivatives Analyst at StoxBox sees the power sector stock at Rs 725 in a year.

“Jindal Steel is making higher high- low formations since June. It has found a good support at 10- and 20-EMAs on the daily chart. Recently, the stock saw a good bounce from its 10-daily EMA on above-average volumes, which is a bullish sign. The stock is also outperforming relatively in comparison to Nifty and that its 14-period RSI indicator is consolidating between 55 and 65 levels, which suggests the momentum is intact. One can buy the stock at current level or at pullback towards Rs 662, with targets of Rs 700 and Rs 725, respectively. One can place stop loss below Rs 644,” said Vanara.

Abhijeet from Tips2trades said, "Jindal Steel and Power looks bearish on the Daily charts with strong resistance at Rs 691. A daily close below support of Rs 655 could lead to a target of Rs 600 in the near term."

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