Mehabe score: 7 G Factor: 5 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 7.
Description
Jindal Stainless is engaged in a leading manufacturer of Stainless Steel flat products in Austenitic, Ferritic, Martensitic and Duplex grades. The product range includes Ferro Alloys, Stainless Steel Slabs, Hot Rolled Coils, Plates and Sheets, and Cold Rolled Coils and Sheets.(Source : 201903 Annual Report Page No: 123)Site:JSLMain Symbol:JSL
Stock trades at 152.0, above its 50dma 108.41. It also trades above its 200dma 82.63. The stock remains bullish on techicals
The 52 week high is at 158.40 and the 52week low is at 35.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 11.28% over past five years.
– has a low return on equity of 6.21% for last 3 years.
-Contingent liabilities of Rs.3688.95 Cr.
-Promoters have pledged 86.64% of their holding.
Competition
– The industry trades at a mean P/E of 13.9x. APL Apollo Tubes trades at the industry’s max P/E of 55.86x. JSL trades at a P/E of 20.8x
– Industry’s mean G-Factor is 6.0 while the mean Piotski score is 8.0. JSL has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 12.5%. The max 1- month return was given by Jindal Stain.: a return of 42.81 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 4033.0 cr compared to Rs 1376.0 cr for period ended Jun 2020, a rise of 193.1%
Operating Profits reported at Rs 601.0 cr for period ended Jun 2021 vis-vis 46.0 for period ended Jun 2020 .
Operating Margins expanded 1155.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 6.21 compared to Rs 5.94 for previous quarter ended Mar 2021 and Rs -2.5 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 14845.0 cr for period ended TTM vis-vis sales of Rs 12188.0 cr for the period ended Mar 2021, a healthy growth of 17.9%. The 3 year sales cagr stood at 3.1%.
Operating margins expanded to 13.0% for period ended TTM vis-vis 12.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 844.0 cr for period ended TTM vis-vis sales of Rs 419.0 cr for the period ended Mar 2021, rising 50.4%.
Company recorded a healthy Net Profit CAGR of 81.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1308.0 cr for period ended Mar 2021 vis-vis Rs 1180.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 12.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 304% on a 1 Year basis vis-vis a return of 36% over the last 3 Years. – The compounded sales growth on a TTM bassis is -6% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is 418% vis-vis a compounded profit growth of 1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 14.76% vis-vis 13.21% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 11.11% vis-vis 11.35% for Mar 2021
Conclusion
– has reduced debt. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 11.28% over past five years.
– has a low return on equity of 6.21% for last 3 years.
-Contingent liabilities of Rs.3688.95 Cr.
-Promoters have pledged 86.64% of their holding.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 108.41 and is trading at 152.0, thus bullish price action wise.
