Jindal Steel & Power Ltd (JSPL) touched a 52 week high, in today's session, of Rs 427.60 per share on the back of strong volume and steel sector bullishness which was supported by elevated price per tonne by steel companies. It witnessed a total traded quantity of 12.06 lacs with a delivery percentage of 29.07 as compared to 12.89 and 14.42 percentage in the last two trading sessions; approximately 2x.
JSPL reported a record sale in Mar'21, up 61% y-o-y and 44% m-o-m. It also achieved its highest ever annual production and sales of 7.51 MT (+19% YoY) and 7.28 MT (+20% YOY). A Recent institutional research report by Centrum has given Jindal Steel and Power a target price of Rs 581, forecasting an upside of 52%. It states that major long steel producer has successfully ramped up its capacity and deleveraged its balance sheet during FY19-21 and expect the deleveraging and asset sweating to continue with net debt to be reduced to Rs 132.3 bn by FY22E (Rs 213bn by FY21 end) with a Net Debt/EBITA of 0.9x.
In February, 2021, Edelweiss Securities mentioned they are positive on the volume ramp up besides its the focus on value over volume and maintained a buy rating on the company with a target price of Rs 378.
The India steel sector has rebounded strongly from COVID-19 disruption, domestic demand recovery is led by auto sector and government's push for infra pipeline. Steel realisations remain high with price hikes (amid tight supply and high raw material costs), robust domestic demand and high international prices.
The current price levels are likely to be sustained in the near term on the back of robust domestic fundamentals. Export orders are strong, driven by robust regional (particularly Chinese) demand and pricing. High leverage levels have receded; as upcycle spreads have aided material debt reduction.
The company trades at a P/E of 10.58 against its sectoral P/E of 46.35 and its market capital currently stands at Rs 42,407 cr. It's been the highest wealth creator in the steel sector in the last 1 year.
Shares of JINDAL STEEL & POWER LTD. was last trading in BSE at Rs.415.75 as compared to the previous close of Rs. 388.75. The total number of shares traded during the day was 1205509 in over 12810 trades.
The stock hit an intraday high of Rs. 427.6 and intraday low of 391.65. The net turnover during the day was Rs. 492521544.