27 Oct , 2021 By : Kanchan Joshi
Shares of Jindal Stainless were trading nearly 4% higher in Wednesday's deals after the company posted a five-fold jump in consolidated net profit at Rs411.62 crore for the September quarter, mainly on account of higher income, as compared to Rs80.64 in the year-ago quarter.
Jindal Stainless (JSL) reported better-than-expected EBITDA during the second quarter. “Increasing raw material prices (nickel and ferrochrome) helped inventory valuation and consequently EBITDA," ICICI Securities said in a note.
The brokerage has maintained its Buy rating on Jindal Stainless stock with a revised target price of Rs250 per share (from Rs230 per share earlier). It has also upgraded its estimates for JSL, post a superlative H1FY22 print.
The company’s petition for merger with JSHL (Jindal Stainless (Hissar) is pending before NCLT, Chandigarh for approval. All brownfield expansion projects announced in Q1FY22 are on track, as per the brokerage.
“Significant buildup in working capital and growth capex in H1FY22 didn’t allow for deleveraging as net debt (excluding group company JSHL’s debt) increased to Rs15.6 bn from Rs14.5 bn QoQ," ICICI Securities note stated.
All major end-use segments like process industry, pipe & tube, railways & wagons, and metro rail grew during Q2FY22, keeping stainless steel demand firm. As general manufacturing picked up pace, demand for special grades like duplex and super austenitic, where JSL is an established supplier, also gained momentum, it added. “Despite prevailing logistical challenges due to container scarcity, JSL managed through advance planning and strategic sourcing of raw materials."
Jindial Stainless (JSL) is among the market leaders of stainless steel in India with production facilities in Haryana, Odisha and Indonesia. The multibagger stock has rallied 140% in last six months, whereas it is up over 162% in 2021 (year-to-date) so far.
0 Comment