Metal stock in focus: Brokerage house Elara Capital has initiated coverage on Jindal Saw Ltd and assigned the stock a BUY rating, setting a target price of Rs 280. According to the brokerage, the company’s earnings will normalise strongly during FY27-28, supported by several structural factors.
Brokerage house Elara Capital also believes that the company will benefit significantly from increased spending under the Jal Jeevan Mission, regulatory reforms in the oil and gas sector, and rising capex in line pipes globally. The focus on energy security, especially amid rising geopolitical tensions and supply chain risks around the Strait of Hormuz, has intensified, keeping pipe demand strong.
Strong order book backed by International Business Support
Jal Jeevan mission to drive domestic demand growth
A revival in Jal Jeevan Mission spending is likely to boost domestic pipe demand, while global pipeline capex remains supported by energy security concerns. Export growth is also picking up, with diversification reducing dependence on domestic capex.
Attractive valuations at current levels
Elara says that the current valuation does not fully capture the company’s strong fundamentals and upcoming growth, leaving the stock with further upside potential. Overall, valuations appear attractive, with potential for rerating driven by strong execution and growth prospects.
Shares of the metal stock were trading at Rs 212.00 at 9:18 AM, up 3.34 per cent from the previous close of Rs 205.15.
Jindal Saw reported a weak Q3 performance, with consolidated profit after tax declining 49.1 per cent year-on-year to Rs 257.9 crore, while revenue fell 6.2 per cent to Rs 4,943 crore. EBITDA dropped 34.8 per cent to Rs 612.6 crore, with margins contracting sharply to 12.4 per cent from 17.8 per cent in the corresponding quarter last year.
Jindal SAW Ltd, established in 1984 and part of the USD 18 billion O.P. Jindal Group, is a leading global manufacturer of iron and steel pipes (SAW, Ductile Iron, Seamless) and pellets. As a “Total Pipe Solutions” provider, it serves the oil & gas, water, and industrial sectors with 16+ manufacturing units and global exports.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
