Multibagger Metal stock gets ‘buy’ tag from ICICI Securities after Q3 results

Brokerage retains its buy rating multibagger stockWhich has grown by over 180% in a span of one year, with a target price of 252 per share. The metal stock is up about 8% so far in 2022 (year-to-date or YTD).

“All major end-use segments such as process industry, pipe & tube, railway & wagon, and metro rail grew during Q3FY22 keeping the demand for stainless steel strong. As general manufacturing accelerated, demand for specialty grades such as duplex and super austenitic also accelerated, where JSL is an established supplier,” the note said.

The company’s petition for merger with Jindal Stainless (Hisar) (JSHL) is pending before NCLT, Chandigarh for approval. The brokerage highlighted, all brownfield expansion projects announced in Q1FY22 are on track.

The significant buildup in working capital of Jindal Stainless and growth capex in 9MFY22 did not allow delivering as net debt (excluding debt to group company JSHL). to 17.6 billion 15.6 billion quarter-on-quarter (QoQ).

“Despite the existing logistical challenges due to container shortage, JSL manages through advance planning and strategic sourcing of raw materials. Exports grew by 26% by volume (up 23% QoQ). Management has highlighted the continued increase in stainless steel imports from China and Chinese-funded investments in Indonesia; ICICI Securities said, with imports accounting for ~36% of the domestic market, ~40% QoQ.

Jindal Stainless’s earnings up during the third quarter 5,682 crore, from 3,592 crore in the year-ago period. The board of the company has given approval to increase up to 3,500 crore by issuing debt securities.

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