JINDAL SAW LTD - KRC Stock Recommendation
JINDAL SAW LTD
UPDATE: Q3FY08
Key Data
CMP Rs 652
Date April 24th 2008
Sector Metals – Steel
Face Value Rs.10
BSE Code 500378
52 Week H/L Rs 1224/ 517
Market Cap Rs 3334 Cr
Investment Rationale
The Q308 results were beyond market expectations. Net Sales was up by 35percent and profit after tax was up by 83percent. EBIDTA was up by 46percent. The key driver for the robust performance was because of higher sales volume and better cost management. Company booked a profit of Rs463.78crore by selling its stake of a US subsidiary company. The Company is also venturing into new businesses and diversifying its portfolio.
KEY DEVELOPMENTS
Sales and Net Profit grew by 35percent and 83percent respectively
The company posted a growth of 35percent in Net Sales to Rs.1611Crore during the quarter from Rs1192crore in Q3FY07. Net Profit grew by a whooping 83 percent to Rs110Crore during the quarter from Rs.60Crore in Q3FY07.Net profit was high because of higher sales volume and better cost management
Strong Order Book
Jindal Saw recently bagged an order of more than 200mnUSD from Cairn India for supply of line pipes, tracer tube, insulation and bends for Barmer Salaya Pipe Line (BSPL) project of Cairn. With this order, the total order book of JSL exceeds US$ 1 billion). These orders are scheduled to be executed by January, 2009.
FINANCIAL PERFORMANCE
The company declared robust results in Q3FY08 as its net profit increased by 83 percent to Rs110crore from Rs60crore in corresponding Q3FY07, Also the net sales of the company increased by 35percent to Rs.1611Crore from Rs1192crore in Q3FY07.
VALUATIONS
At the CMP of Rs.652 Jindal Saw is quoting at P/E of 9.13x TTM December 07 earnings and 1.78x its book value. The company is expected to grow on account of capacity expansion, higher pipes demand and better operating efficiency.
Click Here for In-depth JINDAL SAW LTD research report by KR Choksey, company profile along with stock recommendations, JINDAL SAW LTD target price and for making informed investment decisions.
Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone: 91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com
Email: customercare@krchoksey.com / eservices@krchoksey.com
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