Jindal Saw: A good track record
Jindal Saw is a leading player in SAW Pipes, Ductile Iron Pipes & Fittings, Carbon, Alloys, Stainless Steel Pipes & Tubes, Pellets, etc. It has a long track record of paying consistent dividends and a good track record of profitability.
In July last year, the stock hit a 52-week high at Rs 147 and is now trading at Rs 117. The company is expected to be back on track, following the diminishing implications of Covid. over the next few quarters.
Good quarterly figures
The company released strong quarterly figures for the September quarter of 2021. Total revenue during the period stood at Rs 3,004 crores compared to Rs 2,446 crores during the corresponding period of the previous year. Net profit for the quarter of September 30, 2021 was placed at Rs 178 crores. Over the quarters, the company has consistently achieved profitability.
With the economy back on track, demand for pipes, especially SAW pipes, is likely to increase. SAW pipes find application in a host of fields including the oil, gas and water industry. Jindal saw is the market leader in its segment in India and has supplied pipes for major pipeline projects in the Middle East, North America, Latin America, Africa, Europe, Australia, CIS and in Asia.
Estimates and view
The company reported EPS of Rs 3.78 for the quarter ending September 30, 2021. We do not see any significant profit drift from the company in the coming quarters. This would make EPS around 15 and a little higher for the coming year. This means that the stock, which is trading around the Rs 117 mark, is available at an ap/e of around 8. That is not expensive at all. Over the past 5 years, the company has worked hard to reduce its debt, which has now been reduced over the years.
The dividend yield is also now close to the 2% mark. Overall, the stock is available at reasonable p/e multiples, given that the indices themselves trade at a p/e of 21 times. Buy Jindal Saw shares if you are a long-term investor.
Investing in stocks is risky and so investors need to understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any loss caused based on the article. The author and his family do not hold shares in the above company, namely: Jindal Saw Ltd.