Hold Jindal Saw; target of Rs 229: Asit C. Mehta

8461 Investors following Jindal Saw. Share this News with them.

0

Like this story, share it with millions of investors on M3

Hold Jindal Saw; target of Rs 229: Asit C. Mehta

Asit C. Mehta has maintained hold rating on Jindal Saw with a target of Rs 229 in its November 10, 2010 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

ALSO READ See previous views by Asit C. Mehta See what other Experts & Brokerages are saying about Jindal Saw See messages about Jindal Saw Jindal Saw BSE | NSE 01/06/12 Are Mutual Funds betting on Jindal Saw?

Asit C. Mehta has maintained hold rating on Jindal Saw with a target of Rs 229 in its November 10, 2010 research report.

"Jindal Saw Ltd's (JSL) revenue declined 41.6% to Rs 8022.7 million on account of decline in volumes, while net profits declined by 30.3%. The company registered healthy operating profits of USD 305 per ton as HSAW constituted smaller portion of sales mix. The company's order book stood at USD 780 million as of Q2FY11, as against USD 705 million in Q2 FY10."

"JSL's revenue fell 41.6% to Rs 8022.7 million in Q2 FY11 versus Rs 13728.5 million in Q2 FY10. The drop in revenues was primarily on account of lower volumes and moderate realizations. JSL sold 43,000 MT of Saw pipes in the current quarter vs 75,0000MT in Q2 FY10, as dispatches of ~20,000 MT of large diameter pipes were withheld on account of heavy rains in north India. Realizations in saw and seamless pipes moderated on YoY basis to ~ USD 1500 - 1600 which further contributed to decline in revenues. The company's operating profit margin improved to 23.2% in Q2 FY11 vs, 18.6% in Q2FY10. The company sold 3,000 MT of HSAW and 40,000 MT of LSAW as a result in absolute terms the company registered healthy blended operating profits of ~USD 305 per ton. For Q2FY11, the company's net profits declined by 30.3% to Rs 1021.4 million. However, NPM improved to 12.7% in Q2 FY11 from 10.7% in Q2 FY10, driven by higher operating profit margins."

"For last few quarters saw segment has witness moderate order inflows, while seamless pipe order inflows have been affected by slow down in E&P expenditure. DI pipes segment order inflows have been strong and outlook for the segment remains positive. AT CMP of Rs 220, JSL is trading at FY11E P/E of 11.8x and FY12E P/E of 9.6x. We expect net sales to grow to Rs 65741.1 million in FY12E, primarily driven by volume growth and EPS to grow to Rs 22.9 in FY12E. We assign a P/E of 10x to FY12E of Rs 22.9 to arrive at a price target of Rs 229 and maintain our HOLD recommendation," says Asit C. Mehta research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment