Not Tata Steel, Vedanta Or HindZinc, But This Metal Stock May Fetch 10% Gains In 5-15 Days; Beats Nifty 500

India's metal prices have continued to edge higher, however, at a favourable pace. This is despite a decline in prices in major commodities markets like China and the European Union. At home, the demand remains stable as elections continue in full swing, while expectations are that smaller hikes may occur in the coming months. In such a scenario, holding the right iron and steel stock is crucial!

Both Nifty 500 and Nifty Metal index have plunged by 2-3.5% in the five trading sessions of May so far. And in a year, the two indexes have outperformed Nifty with gains of 34% and 53.5% as against the 50-scrip benchmark's upside of 22%.

And there is one steel stock that has outperformed these three indices with extraordinary gains. It's not the top players like Tata Steel, Vedanta or Hindustan Zinc who have gained by 41-50% in a year. But instead, the multi-billion dollar O.P. Jindal Group's iron and steel maker, Jindal Saw.

Jindal Saw has surged by 252.49% on NSE, emerging as a multibagger. As per Axis Securities data, the stock beats the Nifty 500 by 219.88%. Also, the brokerage highlighted key factors among its stock trivia. These are:

- MF shareholding in Jindal Saw Ltd has increased by 44.94% in past 3 Months

- Jindal Saw Ltd is trading very close to its 52 Week High

- Jindal Saw Ltd is trading very close to its All-time High

Jindal Saw's 52-week high and low are at Rs 598 and Rs 155.50 respectively. As per NSE data, the stock's adjusted price-to-equity ratio is at 13.38x.

The stock touched its 52-week high levels on May 6, 2024, and accordingly, on May 7th, it witnessed profit booking. On Tuesday, Jindal Saw's share price was at Rs 566.10 apiece, down by 3.86%. This brings an opportunity for buy-on-dips as Axis Securities has also recommended buying the stock to fetch gains in 5-15 days.

Jindal Saw is included in Axis' Alpha Positional pick with a target to have a timeframe of 5-15 days. The current market price of Jindal Saw is near Axis Securities' recommendation to investors of entry price of Rs 565.

The brokerage has suggested buying for a target price of Rs 622 with a stop loss of Rs 508. This signals a potential upside of 9.5% in the coming days.

As per the regulatory filing on May 7, Jindal Saw posted a consolidated net profit of Rs 4,804 crore in Q4FY24, rising by 61.5% YoY, while EBITDA climbed by 45.7% YoY to Rs 9,888 crore. Total income stood at Rs 54,937 crore, up by 4.3% YoY.

As of 31st March 2024, the net institutional debt of the Company (at a standalone level) was ~Rs. 32,551 million (~Rs 31,692 million on 31st March 2023) including long-term loans and fund-based working capital borrowings. This includes Net working capital borrowings (short term) of ~ Rs. 14,926 million on 31st March 2024 (~Rs. 20,237 million on 31st March 2023) and Long-term Rupee Loans / Rupee NCDs of ~Rs. 17,625 million on 31st March 2024 (~Rs. 11,455 million on 31st March 2023).

Jindal Saw has a business model that is well-diversified in terms of strategic locations, markets, products, industries, and customers. The business model is designed to create a hedge against simultaneous risks and adverse macros, which allows it to operate and perform in difficult economic and geopolitical circumstances. The Company's domestic and export markets are well-balanced, and its business profile includes the manufacturing of iron & steel pipes and pellets.

Jindal Saw in its statement said that steel pipes are projected to remain highly sought-after, also due to their increased usage in power generation, as well as increasing construction of new pipelines, replacement of ageing pipelines, and upgrading of existing petrochemical facilities in the oil and gas sector.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.