Multibagger Metal Stock Hits Record High As Q2 PAT Surges 34% YoY: Buy?

Following the release of strong quarterly results for Q2FY24, the shares of JTL Industries reached a lifetime high of Rs 249.50 on Friday on the BSE after commencing at Rs 239.95. The stock subsequently wrapped up with an upside gap of 4.40% at Rs 246.70. JTL Industries announced that its net profit climbed 34% year on year (YoY) in the September 2023 quarter, rising to Rs. 27.91 crore from Rs. 20.90 crore in the same period last year. Its revenue from operations climbed by roughly 37% annually, from Rs 356.93 crore in Q2FY23 to Rs 502.10 crore in Q2FY24.

The company's net profit for the six-month period that ended on September 30, 2023, jumped by more than 52% to Rs. 53.28 crore from Rs. 32.98 crore in the same period of FY23. Revenue from operations climbed by 37% to Rs 1,006.96 crore in the first half of the current fiscal year, from Rs 733.96 crore in the same period last year.

In the July to September 2023 quarter (Q2FY24), JTL Industries reported its highest-ever quarterly sales volume of 81,686 metric tonnes (MT), with an increase of 56.78% over Q2FY23. In the first half of the current fiscal year (H1FY24), JTL Industries generated its highest-ever sales volume of 1,59,028 MT.

Following healthy Q2 numbers, Axis Securities said in a note that "JTL Industries' (JTL) numbers stood below our estimates, mainly led by a miss against our sales realisation. Lower VAP share impacted the realisation more than our expectations. Revenue grew by 37% YoY but stood marginally down by 1% QoQ at Rs 502 Cr (5% miss), despite 6% QoQ growth in sales volume. This was mainly due to lower VAP share at 35% vs. 42% in Q1FY23 and 47% in Q2FY23. EBITDA grew by 16%/5% YoY/QoQ to Rs 37 Cr, missing our estimate by 10% and was on account of a miss at topline. EBITDA/t stood almost flat at Rs 4,580/t QoQ (down 26% on a higher base of the last year). PAT stood at Rs 28 Cr, (up 34%/10% YoY/QoQ), a 4% miss against our estimate, led by lower EBITDA, partially offset by lower D&A expenses and higher other income."

Commenting on the share price outlook of JTL Industries, the brokerage said, "We maintain our BUY rating on the stock and value JTL at 23x (from 22x) it's FY25 EPS (unchanged) to arrive at our 1-year forward target price of Rs 265/share, implying an upside potential of 12% from the CMP."

JTL Industries made a 52-week-high of Rs 249.50 on (13/10/2023) and a 52-week-low of Rs 118.33 on (17/10/2022). The stock has produced a multibagger return of 2,262% over the past five years, and a multibagger return of 1,567% during the past three years. The scrip went up by 75% during the past year, and YTD so far in 2023, it has appreciated by 58%.

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