ICICI Securities Is Bullish On These 2 Jindal Group Stocks, Suggests Buy For Gain Up To 30%

ICICI Securities recently published brokerage reports on two Jinal Group Companies, Jinal Stainless Ltd & Jindal Stainless (Hisar) Ltd., recommending investors 'buy' the stock for potential gains up to 30%. The brokerage is bullish on stocks and sees a good upside in the next 12 months.

Jindal Stainless Ltd

Jindal Stainless (JSL) is among the leading stainless steel manufacturing companies in the world and India's largest stainless steel manufacturer. JSL operates an integrated stainless steel plant at Jajpur, Odisha. The complex has a total stainless steel capacity of 1.1 million tonnes per annum. The company has readily leveragable infrastructure for cost-efficient brownfield expansion

Stock Outlook - The Current Market Price (CMP) of the JSL is Rs 104.35/share. It was opened at Rs 102.85/share, while the previous close was Rs 103.3/share. The stock has hit the 52-week low last month on 20 June at Rs 95.05/share, while the 52-week high it recorded on 08 February 2022 at Rs 224.40/share. The CMP of the stock is Rs 9.3 above its 52-week low levels.Other Details - The PE ratio of the stock is 2.91, while the sector PE ratio is 6.26. The PB ratio is 1.64. Return on Equity (ROE) is 36.27%. EPS is Rs 35.80. Jindal Stainless Ltd is a small-cap stock with a Market Capitalization of Rs 5,483 crore.Returns - In terms of returns, the stock has performed well on long-term investment with multibagger returns. In 3 years, it has delivered 225.59% multibagger returns and 31.27% in 5 years, respectively. In the past 1 week, its share price slid 9.05%, in 1 month 49.36% negative returns, and in past 1 year, its share price slid nearly 14.69%.Potential Gains - The brokerage is bullish on the stock, and suggests buying for Rs 125 target price. It has the potential to gain 30% in 12 months considering the CMP & Target price of the stock.ICICI Securities ViewsICICI Securities said, "Jindal Stainless' share price has given a return of ~151% in the last two years (from ~|Rs 41 in July 2020 to ~Rs 103 in July 2022). We maintain our BUY rating on the stock. We value JSL at Rs 125, based on a merged entity basis."According to the brokerage, the key highlights of Jindal Stainless Ltd are:

• Post the levy of export duty, for the combined entity (JSL+JSHL), the company has given EBITDA/tonne guidance of |18000-20000/tonne. (During FY22 the EBITDA/tonne of combined entity was at Rs 27609/tonne).
• Before the levy of export duty, for the combined entity (JSL+JSHL) export volume run-rate was ~25000-30000 tonnes per month. Post the duty, the export volume run-rate has declined to ~15000-16000 tonnes per month.
• The total capex for the combined entity for capacity expansion is Rs 2600 crore. Of this ~Rs 1300 crore has already been incurred till March 2022. Of the balance capex, ~Rs 900-1100 crore is expected to be incurred in FY23E and the balance Rs 200-400 crore is expected to be incurred in FY24E

 

Jindal Stainless (Hisar) Ltd

Jindal Stainless (Hisar) Ltd. (JSHL) is one of the leading players in the Indian stainless steel market. JSHL is the largest specialty stainless steel producer in India with a diversified value-added product portfolio. JSHL operates an integrated stainless steel plant at Hisar, Haryana. JSHL has a total melting capacity of 0.8 million tonnes per annum (MTPA).

Stock Outlook - The JSHL's current market price (CMP) is Rs. 217 per share. The last close, on Friday, was Rs 209.15/share, and today it opened with the same previous closing price. The stock's 52-week low was recorded last month on June 20 at Rs 189/share, and its 52-week high was recorded on February 8, 2022, at Rs 431.95/share. The stock's CMP is Rs 28 above its 52-week low.Other Details - The PE ratio of the stock is 2.64, while the sector PE ratio is 5.48. The PB ratio is 1.04. ROE is 39.56%. EPS is Rs 82.33. Jindal Stainless (Hisar) Ltd is also a small-cap stock with a Market Capitalization of Rs 5,119 crore.Returns - The stock has performed similar to JSL, however, the returns are different. It has given positive returns in past 1 week, nearly 7%. In the past 1 year, the stock has given negative returns of 2.21% in the past 1 month and 3.91% negative returns, respectively. It has shown strong long-term performance in terms of returns, generating multibagger returns in 3 years. In 3 years, it has given 189.25%, and 56.95% positive returns in 5 years.Potential Gains - The brokerage recommends buying for a target price of Rs 244/share. Considering the CMO & Target Price, the stock has the potential to gain 13% over the 12 months.ICICI Securities ViewsICICI Securities said, "JSHL's share price has given a return of ~179% over the last two years (from ~75 in July 2020 to ~Rs 209 levels in July 2022). We maintain our BUY rating on the stock. We value JSHL at Rs 244, based on the merger ratio.According to the brokerage, the key highlights of Jindal Stainless (Hisar) Ltd are:

• Post the levy of export duty, for the combined entity (JSL+JSHL), the company has given EBITDA/tonne guidance of Rs 18000-20000/tonne. (during FY22, EBITDA/tonne for the combined entity was at Rs 27609/tonne). Before the levy of export duty, for the combined entity (JSL+JSHL) export volume run-rate was ~25000-30000 tonnes per month. Post the duty, the export volume run-rate has declined to ~15000-16000 tonnes per month.
• The total capex for the combined entity for capacity expansion is Rs 2600 crore. Of this ~Rs 1300 crore has already been incurred till March 2022. Of the balance capex, ~Rs 900-1100 crore is expected to be incurred in FY23E and the balance Rs 200-400 crore is expected to be incurred in FY24E.

Jindal Stocks

CMP, Target Price, Potential Gains

Jindal Stocks	CMP	Target Price	Potential Upside
JSL	Rs 104.35	Rs 125	30.00%
JSHL	Rs. 217	Rs 244	13.00%

Returns

Tata Stocks	1-Year	3-Years	5-Years
JSL	-14.69%	225.59%	31.27%
JSHL	-2.21%	189.25%	56.95%

Disclaimer

The stocks have been picked from the brokerage reports of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.