Jindal Saw, the flagship company of the PR Jindal group, major products are longitudinal submerged arc welded (LSAW) pipes, helical SAW (HSAW) pipes, ductile iron (DI) pipes and seamless pipes and pellets.
The Company’s revenue is well balanced among various products with no single product contributing more than 30 per cent of its revenue. Most of the products contribute between 10 per cent to 30 per cent of the total revenue, thus providing diversification to the cash flows and hedge against market volatility related to any single product.
Jindal Saw has a strong presence in the overseas market, with export contributing around 25 per cent to its top line. A larger portion of the exports are to Latin American countries and MENA region. Almost half of the Company’s revenues come from water supply and sanitation (WSS), which is growing rapidly in India and globally.
The Company’s exposure to the oil and gas sector accounts for only one third of the total revenue. Due to its diversified portfolio, the Company has been able to protect itself from the volatilities in one or more strategic business units. Jindal Saw’s client portfolio includes the government and the private sector, with a strong domestic and international presence across brands.
Analysts believe that the company shall be able to report healthy operating performance on the back of its relatively de-risked business model with the benefits of diversification in terms of both product segments and manufacturing locations, and competitive cost structure with captive availability of iron ore for its pellet plant. Furthermore, favourable industry tailwinds on the back of government’s push towards investment in water sector and renewed focus on investments in global oil and gas sector shall benefit the company in the medium term.
Credits - Business standard
Financial Performance:
- Q3 FY23 turnover grew by 38% and 63% compared to the previous two quarters, respectively
- EBITDA showed growth of 61% and 140% for the last two quarters
- Debt levels have been reduced, and the balance sheet remains strong
Order Book:
- The company has a healthy order book with a good mix of domestic and international orders
- Large dia business is expected to be a driver for the next quarter, with significant export orders in the basket
- Healthy sales funnel for future orders
Product Strategy:
- Emphasis on premium and value-added products expected to continue to contribute to growth
- Moving towards value-added and premium products in all segments, including high-grade pellets, improved coatings, and new product development in DI, seamless, and stainless steel
Capex:
- No major capex planned, but the potential for a steel project in Dilwara in the future
- Considering a truncated form of a steel plant that will cater to the Nashik and Nagothane raw material inputs, which at this point in time, they buy from outside
Guidance:
- The company is confident that the momentum will continue, and they expect a good next few quarters
- EBITDA margin expected to improve to upward of 14% in Q2 FY24
- Expectation of government support for infrastructure projects in the upcoming budget
Legal:
- Sathavahana project execution expected after advance payment
- The Sathavahana project is sub judice, but the company expects a positive result in its favor and plans to add over 200,000 metric tons to capacity once in business
- The company has not yet invested in repair and maintenance for the Sathavahana project until a positive result is received
Working Capital:
- Jindal Saw Limited is using the excess cash generated to bring down its working capital cycle, which will help control working capital utilization and lower finance costs
- Working capital utilization is positively correlated to top-line growth
Market Cap:
- The management hopes that the market cap will reflect the value they have created and are working so hard to create.
All in all, I feel this is another undervalued company with high growth prospects and is not in the limelight yet. Do share your thoughts on the same.
Update - NCLT Hyderabad Approves The Resolution Plan Of Jindal Saw Ltd. For Sathavahana Ispat Ltd.
NCLT Hyderabad Approves The Resolution Plan Of Jindal Saw Ltd. For Sathavahana Ispat Ltd.
I have invested in Jindal poly from long time and had a very bad feedback for complete Jindal group.
They never care about retail investor and also not provide any benefits to share holders. They always trying to cheat and also try to perform many corporate action without thinking morality or ethical standard to perform those.
I have attended many of their AGM and as investor we keep complaining their issue and they even not bother to respond to any investor.
So, be careful investing even small amount in any of Jindal group shares even there is lot of value in any counters. I am planning to take exit soon in all my Jindal holdings in few quarters before someone comes with report like Adani listed groups.
Happy Investing
Karthik
Disclosure: I am having exposures to many Jindal group company share for past 10 years and this is not buy or sell recommendation.
1 Like
| Narration |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 |
Mar-20 |
Mar-21 |
Mar-22 |
Mar-23 |
Trailing |
Best Case |
Worst Case |
| Sales |
6,655.85 |
8,207.83 |
7,702.58 |
7,070.12 |
8,506.62 |
12,117.00 |
11,627.04 |
10,663.64 |
13,298.42 |
17,867.80 |
18,799.55 |
24,007.23 |
20,047.96 |
| Expenses |
6,014.34 |
7,253.88 |
6,979.40 |
6,393.18 |
7,465.90 |
10,645.12 |
10,116.24 |
9,421.52 |
11,898.98 |
16,190.55 |
16,765.05 |
21,409.15 |
17,978.06 |
| Operating Profit |
641.51 |
953.95 |
723.18 |
676.94 |
1,040.72 |
1,471.88 |
1,510.80 |
1,242.12 |
1,399.44 |
1,677.25 |
2,034.50 |
2,598.08 |
2,069.89 |
| Other Income |
26.18 |
75.87 |
135.69 |
330.35 |
24.05 |
514.97 |
-2.67 |
208.82 |
155.14 |
141.12 |
159.35 |
- |
- |
| Depreciation |
321.28 |
335.48 |
327.94 |
337.41 |
363.48 |
396.28 |
421.67 |
458.87 |
472.99 |
470.78 |
494.20 |
494.20 |
494.20 |
| Interest |
391.97 |
605.64 |
678.85 |
568.63 |
579.15 |
615.23 |
619.85 |
492.79 |
460.12 |
637.59 |
637.12 |
637.12 |
637.12 |
| Profit before tax |
-45.56 |
88.70 |
-147.92 |
101.25 |
122.14 |
975.34 |
466.61 |
499.28 |
621.47 |
710.00 |
1,062.53 |
1,466.76 |
938.57 |
| Tax |
54.66 |
116.11 |
-67.72 |
62.74 |
133.12 |
211.62 |
5.34 |
171.54 |
245.59 |
267.24 |
360.63 |
34% |
34% |
| Net profit |
-85.54 |
-14.47 |
-40.16 |
113.77 |
178.50 |
850.16 |
554.75 |
318.83 |
411.75 |
632.40 |
890.69 |
968.93 |
620.01 |
| EPS |
-3.10 |
-0.50 |
-1.32 |
3.56 |
5.58 |
26.58 |
17.35 |
9.97 |
12.88 |
19.77 |
27.86 |
30.30 |
19.39 |
| Price to earning |
-17.24 |
-124.40 |
-27.70 |
23.44 |
21.28 |
3.25 |
2.64 |
7.44 |
7.00 |
7.38 |
12.06 |
12.06 |
6.63 |
| Price |
53.38 |
62.07 |
36.53 |
83.40 |
118.75 |
86.40 |
45.80 |
74.15 |
90.10 |
145.90 |
336.05 |
365.57 |
128.52 |
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| RATIOS: |
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| Dividend Payout |
0.00% |
0.00% |
0.00% |
28.11% |
21.50% |
7.52% |
11.53% |
20.06% |
15.53% |
15.17% |
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| OPM |
9.64% |
11.62% |
9.39% |
9.57% |
12.23% |
12.15% |
12.99% |
11.65% |
10.52% |
9.39% |
10.82% |
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TRENDS: |
10 YEARS |
7 YEARS |
5 YEARS |
3 YEARS |
RECENT |
BEST |
WORST |
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Sales Growth |
11.60% |
12.77% |
16.00% |
15.40% |
34.36% |
34.36% |
11.60% |
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OPM |
10.93% |
11.11% |
11.13% |
10.32% |
10.82% |
10.82% |
10.32% |
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Price to Earning |
10.56 |
10.56 |
6.63 |
8.47 |
12.06 |
12.06 |
6.63 |
| Source - screener |
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Risk Analysis -
Any major incremental cash support towards subsidiaries/group companies further straining its leverage
• Sizable reduction in order book position.
• Any major debt-funded capex or acquisition resulting in deterioration of TOL/TNW beyond 1 times.
• Any adverse outcome from the ongoing litigation between NTPC and JITF resulting in further support provided to JITF, thereby impacting JSAW’s leverage and debt coverage indicators.
Disclosure - I am invested in the company
Credit rating by CARE ratings ltd.
