BENGALURU (Reuters) – India’s Jindal SAW reported a surge in first-quarter profit on Monday as higher orders from the Middle East and North Africa offset frail domestic demand.
The company which makes pipes for the energy, transportation and water sectors, said its consolidated profit after tax grew 66% to 4.41 billion rupees (around $53 million in the three months ended June 30.
KEY CONTEXT
Jindal SAW’s orders from the MENA region contributed to 32% of the total order book in the quarter. Its sales volume of iron and steel pipes grew 8% to 400,000 metric tonnes.
However, steel firms’ earnings were hit by muted domestic demand as government spending in manufacturing and construction sectors took a hit due to the national election which took place in the reporting quarter.
Increased manufacturing and construction demand had boosted earnings for steelmakers in the past year, ahead of the elections.
Industry majors, JSW Steel and Jindal Steel reported smaller profits in the quarter on muted demand.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth rating* analyst price yield
(%) s target** (%)
Jindal SAW 10.11 6.70 8.60 5.06 Strong 2 0.83 0.69
Buy
APL Apollo Tubes 36.34 23.55 22.34 38.95 Buy 13 0.85 0.34
Ratnamani Metals 33.45 22.97 16.87 19.63 Buy 3 1.00 0.39
and Tubes
JSW Steel 16.12 8.65 11.50 37.29 Hold 28 1.00 0.81
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG IBES
— $1 = 83.7264 Indian rupees
(Reporting by Manvi Pant in Bengaluru)
