ICICIdirect.com has recommended hold rating on Jindal Saw with a target price of Rs 82, in its research report dated October 27, 2014.
ICICIdirect.com's report on Jindal Saw
Jindal Saw reported a good set of Q2FY15 numbers wherein topline, EBITDA and PAT came in higher than our estimates. Pipe sales volume for the quarter stood at ~1,93,000 tonnes, higher than our expectation of ~1,80,000 tonnes
Standalone revenues for Q2FY15 increased 38.5% QoQ and 29.4% YoY to Rs 1591.4 crore (our estimate: Rs 1,327.6 crore)
The EBITDA margin for the quarter came in at 13.2% lower than our expectation of 14.9%.The company reported an EBITDA of Rs 209.4 crore, up 29.4% QoQ and better than our estimate: Rs 198.3 crore
Standalone PAT increased 35.9% QoQ to Rs 74.6 crore (our estimate: Rs 69.2 crore)
"On the back of healthy sales volumes during the quarter, we have revised upwards our sales volume assumptions. We have modelled pipe sales volume of 1.1 million tonne (MT) for FY15E (from 1.0 MT earlier) and maintained our FY16E sales volume at 1.2 MT. Even though the increase in order book augurs well for the company, we have a cautious view on the back of elevated debt levels, which is likely to rise further on account of planned capex. We have valued the stock at 6x FY16E EV/EBITDA. Subsequently, we have arrived at a target price of Rs 82 assigning a HOLD recommendation to the stock", says ICICIdirect.com research report.
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