Buy Jindal Stainless, target price Rs 200: ICICI Securities

ICICI Securities has buy call on Jindal Stainless with a target price of Rs 200. The current market price of Jindal Stainless Ltd. is Rs 103.75. Time period given by analyst is one year when Jindal Stainless Ltd. price can reach defined target.

Jindal Stainless Ltd., incorporated in the year 1980, is a Small Cap company (having a market cap of Rs 5441.51 Crore) operating in Metals - Ferrous sector.

Jindal Stainless Ltd. key Products/Revenue Segments include Steel, Job Work, Sale of services, Export Incentives, Other Operating Revenue and Gases for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 6582.84 Crore, up 15.85 % from last quarter Total Income of Rs 5682.37 Crore and up 67.66 % from last year same quarter Total Income of Rs 3926.30 Crore. Company reported net profit after tax of Rs 749.88 Crore in latest quarter.

Investment Rationale
Jindal Stainless (JSL) management meeting takeaways include: i) Exports can be maintained at 16,000tpm (down from peak run-rate of 30,000tpm) despite the export duty of 15%, mainly on account of higher margins in the US. ii) Blast furnace capex in JUSL is being reconsidered; leverage, holding on to the environmental benefits of running a secondary steel operation and investor feedback has played its part. iii) Merger of JUSL into JSL is also being considered in order to avoid the recurring need for approvals in AGMs, as well as the scrutiny on related-party transactions. As the decisions are being finalised, it expects further disclosure on the same. Given the current export run-rate, and post the imposition of export duty, management expects 5-10% YoY reduction in volumes, which the brokerage has factored in estimates. Upgrade to BUY with a target price of Rs200 (earlier: Rs120).


Promoter/FII Holdings
Promoters held 70.1 per cent stake in the company as of 30-Jun-2022, while FIIs owned 13.77 per cent, DIIs 5.85 per cent.