We initiate coverage on JTLIND on the back of (a) Robust sales volume CAGR of 38.6% over FY26-28E, (b) Increase in % share of VAP resulting in higher EBITDA/t from Rs 3,899 in FY26 to Rs 5,134 in FY28E, and (c) Expansion in RoE/RoCE from 6.6%/8.5% in FY26 to 13.6%/15.1% in FY28E. We expect Revenue/EBITDA/Adj. PAT to grow at a CAGR of 44.1%/59.0%/60.5% during FY26-FY28E period to Rs 4,434 cr/Rs 390 cr/Rs 254 cr respectively. Based on SOTP valuation approach, we value JTLIND’s core business at a target P/E multiple of 18x based on FY28E EPS of Rs 6.5 to arrive at a fair value of Rs 116.2 per share. In addition, we value the company’s 95% stake in JTL Defence at a holdco discount of 30%, thus arriving at a fair value of Rs 10.7 per share. Consequently, we arrive at a target price of Rs 127/share (rounded-off) for JTLIND on a consolidated basis, implying an upside potential of 67.6% from the current market price.
