Jindal Steel & Power stock turned into a multibagger in three years; more upside likely?
Multibagger stock: Jindal Steel & Power shares have surged 293% during the last three years. The stock has rallied 91% from its 52-week low of Rs 304.20 hit on June 22, 2022.
- Jun 19, 2023,
- Updated Jun 19, 2023 3:28 PM IST
Shares of Jindal Steel & Power Ltd rose nearly 7% today after Kotak Institutional Equities (KIE) assigned a strong upside of 36 per cent to the metal stock. The domestic brokerage firm also upgraded the stock to 'buy' from 'reduce' call. The large cap stock rose 6.67 per cent to Rs 581.25 against the previous close of Rs 544.90 on BSE. Market cap of Jindal Steel rose to Rs 58,298 crore. JSPL stock has lost 1.49 per cent since the beginning of this year and risen 73 per cent in one year. During the last three years, the stock has surged 293%. The stock has surged 91% from its 52-week low of Rs 304.20 hit on June 22, 2022.
In terms of technicals, the relative strength index (RSI) of Jindal Steel stands at 54.4, signaling the stock is neither oversold nor overbought. The stock has a one-year beta of 1.6, indicating very high volatility during the period. Jindal Steel stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
A total of 3.85 lakh shares of the firm changed hands amounting to a turnover of Rs 21.99 crore on BSE.
Gaurav Bissa, VP, InCred Equities said, "Jindal steel has witnessed a strong upside in the last couple of weeks with strong additions seen today. The stock is comfortably trading above its major moving averages like 55ema, 89ema and 200ema on the daily charts which suggests strong trend in the stock. However, the stock is approaching a 6-month descending trendline resistance placed at Rs 600 which makes fresh buying at the current levels less lucrative. The stock can test Rs 600 in the coming days and fresh buying is advised once it closes above the resistance which can push it towards Rs 630-640 levels. Conversely, one can add the stock on declines at Rs 545 to have a lucrative risk reward."
Abhijeet from Tips2trades said, "Jindal Steel and Power looks bullish on the Daily charts with next resistance at Rs 583. A daily close above this resistance could lead to target of Rs 605 in the near term. Strong support will be at Rs 557."
Kotak Institutional Equities (KIE) raised target price of Jindal Steel to Rs 740 from Rs 580.
“A sector-leading growth profile along with the strongest balance sheet makes a strong case for re-rating,” the brokerage firm said.
Kotak sees the next 12 months as a transformational period for JSPL as various projects are lined up for commissioning. JSPL’s capacity would increase by 65 per cent in two phases while higher backward and forward integration over FY2024-26E would structurally lift its margin profile.
"We estimate EBITDA and EPS CAGR of 19 per cent and 17 per cent and 33 per cent and 27 per cent over the next 3 and 5 years, respectively. A large part of growth capex should be met by internal accruals with net debt/EBITDA to peak at 0.8 times in FY2025E. A sector-leading growth profile along with the strongest balance sheet makes a strong case for re-rating," it said.
In June, Nuvama Institutional Equities maintained its 'buy' rating on Jindal Steel with a target price of Rs 737, on the back of the strong balance sheet providing sufficient headroom for expansion and the near-term weakness in the stock should be viewed as a buying opportunity.
"JSPL’s long-term journey towards volume growth, cost control, margin expansion and strong balance sheet is intact, despite a 6-9 month delay in the proposed expansion. Its focus is to commission the first phase of the plant before FY24-end in order to avail tax benefits. The final approval to start captive coal mines and declaration of its capital allocation policy is keenly awaited," Nuvama said.
ICICI Securities assigned a target price of Rs 750 on the stock in mid-May.
"We believe, conducive monetary policies in China are the key for maintaining regional steel prices and international iron ore prices. As a result, we retain our positive view on the ferrous space with a 'buy' rating on Jindal Steel and Power with a target price of Rs 750 on the stock," said ICICI Securities.
Also read: Nykaa shares at Rs 100 or Rs 260? Here are Jefferies' bull & bear case scenarios
Shares of Jindal Steel & Power Ltd rose nearly 7% today after Kotak Institutional Equities (KIE) assigned a strong upside of 36 per cent to the metal stock. The domestic brokerage firm also upgraded the stock to 'buy' from 'reduce' call. The large cap stock rose 6.67 per cent to Rs 581.25 against the previous close of Rs 544.90 on BSE. Market cap of Jindal Steel rose to Rs 58,298 crore. JSPL stock has lost 1.49 per cent since the beginning of this year and risen 73 per cent in one year. During the last three years, the stock has surged 293%. The stock has surged 91% from its 52-week low of Rs 304.20 hit on June 22, 2022.
In terms of technicals, the relative strength index (RSI) of Jindal Steel stands at 54.4, signaling the stock is neither oversold nor overbought. The stock has a one-year beta of 1.6, indicating very high volatility during the period. Jindal Steel stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
A total of 3.85 lakh shares of the firm changed hands amounting to a turnover of Rs 21.99 crore on BSE.
Gaurav Bissa, VP, InCred Equities said, "Jindal steel has witnessed a strong upside in the last couple of weeks with strong additions seen today. The stock is comfortably trading above its major moving averages like 55ema, 89ema and 200ema on the daily charts which suggests strong trend in the stock. However, the stock is approaching a 6-month descending trendline resistance placed at Rs 600 which makes fresh buying at the current levels less lucrative. The stock can test Rs 600 in the coming days and fresh buying is advised once it closes above the resistance which can push it towards Rs 630-640 levels. Conversely, one can add the stock on declines at Rs 545 to have a lucrative risk reward."
Abhijeet from Tips2trades said, "Jindal Steel and Power looks bullish on the Daily charts with next resistance at Rs 583. A daily close above this resistance could lead to target of Rs 605 in the near term. Strong support will be at Rs 557."
Kotak Institutional Equities (KIE) raised target price of Jindal Steel to Rs 740 from Rs 580.
“A sector-leading growth profile along with the strongest balance sheet makes a strong case for re-rating,” the brokerage firm said.
Kotak sees the next 12 months as a transformational period for JSPL as various projects are lined up for commissioning. JSPL’s capacity would increase by 65 per cent in two phases while higher backward and forward integration over FY2024-26E would structurally lift its margin profile.
"We estimate EBITDA and EPS CAGR of 19 per cent and 17 per cent and 33 per cent and 27 per cent over the next 3 and 5 years, respectively. A large part of growth capex should be met by internal accruals with net debt/EBITDA to peak at 0.8 times in FY2025E. A sector-leading growth profile along with the strongest balance sheet makes a strong case for re-rating," it said.
In June, Nuvama Institutional Equities maintained its 'buy' rating on Jindal Steel with a target price of Rs 737, on the back of the strong balance sheet providing sufficient headroom for expansion and the near-term weakness in the stock should be viewed as a buying opportunity.
"JSPL’s long-term journey towards volume growth, cost control, margin expansion and strong balance sheet is intact, despite a 6-9 month delay in the proposed expansion. Its focus is to commission the first phase of the plant before FY24-end in order to avail tax benefits. The final approval to start captive coal mines and declaration of its capital allocation policy is keenly awaited," Nuvama said.
ICICI Securities assigned a target price of Rs 750 on the stock in mid-May.
"We believe, conducive monetary policies in China are the key for maintaining regional steel prices and international iron ore prices. As a result, we retain our positive view on the ferrous space with a 'buy' rating on Jindal Steel and Power with a target price of Rs 750 on the stock," said ICICI Securities.
Also read: Nykaa shares at Rs 100 or Rs 260? Here are Jefferies' bull & bear case scenarios