The stock of this iron & steel company has doubled in three months

Shares of Jindal Stainless hit a new high of Rs 263, as they rallied 7 per cent on the BSE in Friday’s intra-day trade amid heavy volumes on strong business outlook. The stock of iron & steel company surpassed its previous high of Rs 255, touched on January 2, 2023. In comparison, the S&P BSE Sensex was up 0.04 per cent at 60,881 at 11:17 AM.

In past three months, the stock price of Jindal Stainless has doubled or zoomed 99 per cent, as compared to 2.9 per cent rise in the S&P BSE Sensex. In past one month, it rallied 23 per cent, as against 1.3 per cent decline in the benchmark index.

Meanwhile, the group company, Jindal Stainless (Hisar) too hit a new high of Rs 471.90, gaining 3 per cent on the BSE in intra-day trade today. The stock has rallied 84 per cent in past three months. Both the companies are scheduled to announce results on Monday, January 23.

Founded by Shri OP Jindal in 1970, Jindal Stainless (comprising Jindal Stainless and Jindal Stainless (Hisar)) has an annual melt capacity of 1.9 MT and an annual turnover of US $4.20 billion (as of March’22). Already in its expansion phase, the company’s annual melt capacity will reach 2.9 MT by the end of FY23.

On December 5, 2022, Jindal Stainless signed a contract with the country’s largest renewable energy company, ReNew Power, to develop an utilityscale captive renewable energy project for the supply of power to its facility in Jajpur, Odisha.

The project will generate 700 million units per year through a mix of solar and wind technologies. This innovative Wind-Solar hybrid solution, with a High-Capacity Utilization Factor, is expected to generate a significantly higher amount of energy per unit of the contracted capacity, Jindal Stainless said in statement.

While, on December 6, Quant Mutual Fund -Small Cap Fund purchased 2.63 million shares representing 0.52 per cent of the total equity of Jindal Stainless at Rs 182.97 apiece on the NSE, the exchange data shows.

Analysts at ICICI Securities said Jindal Stainless expects volume CAGR of ~20 per cent by FY25; expect FY23 EBITDA margin to sustain at Rs 18,000-20,000/te; majority of committed capex has already incurred; and domestic demand is likely to remain robust led by new applications, particularly from railways.

According to brokerage view, Jindal Stainless is at the cusp of profitability/volume improvement largely on the back of commissioning of new capacity (1.0mntepa) and removal of export duty. Furthermore, the acquisition of JUSL is likely to improve margins by ~Rs 4,000/t in our view, it added. Analysts have ‘buy’ rating on the stock with target price of Rs 270 per share.