Jindal Stainless shares zoom 8% despite fall in Q4 profit; here's why

After initially losing momentum in opening trade, shares of steel manufacturer Jindal Stainless Ltd surged as much as 8.4% on Thursday to hit an intra-day high of ₹303.95 apiece on the BSE, a day after the company reported total profit of ₹716.29 crore for the March quarter, beating analysts' estimates. Despite a fall of 19.96% year-on-year (YoY) during the quarter under review against ₹894.93 crore during the same period last year, the net profit was well above analysts' estimates of ₹603.07 crore.

At present, the shares of Jindal Stainless are trading 7.8% lower than the 52-week high of ₹329, which the company touched on March 8 this year. The stock is trading 219% higher than the 52-week low of ₹95.05, which the company touched on June 20 last year. During the session today, its market capitalisation stood at ₹24,464.24 crore as 2,13,405 shares exchanged hands on the BSE against the two-week average of 0.48 lakh shares.

In the January to March period this year, the company’s revenue surged 0.4% to ₹9,765.08 crore vs ₹9,725.91 crore in the same period last year. The company’s EBITDA (earnings before income, tax, depreciation and amortisation) grew 19% YoY during the quarter under review against ₹1,412 crore in the same period last year.

Sequentially, Jindal Stainless' profit surged 39.4% quarter-on-quarter (QoQ) as against ₹512.62 in the December quarter. The company's revenue also grew 7.7% QoQ sequentially as against ₹9,062.50 crore in the December quarter. In FY23, its profit stood at ₹2,083.83 crore against ₹3,109.39 crore in FY22 and revenue was ₹35,697.03 crore, up from ₹32,732.65 crore in FY22.

The Jindal Stainless board has recommended ₹1.50 dividend for FY23, taking the total dividend payment to ₹2.50 i.e. 125% per equity share with a face value of ₹2 each.

The merger of Jindal Stainless (Hisar) Ltd with Jindal Stainless Ltd was completed, effective from March 02, 2023, the company informed. "After the successful acquisition of Rathi Super Steel Ltd, Jindal Stainless has begun production in the facility ahead of the planned timelines. This was achieved despite the facility being closed for an extended period of time."

According to analysts at ICICI Direct, this expansion would drive the company’s healthy volume growth in the upcoming quarter.

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