India's Jindal Stainless posts Q1 profit beat on domestic demand

Reuters
2-min read

BENGALURU (Reuters) - India's Jindal Stainless on Tuesday posted a first quarter profit that beat analysts estimates as growth in the domestic market help offset a fall in exports.

The company earned a consolidated net profit of 6.48 billion rupees ($77.4 million) for the quarter ended June 30, down 13.1% from a year earlier, but topping analysts' estimate of a profit of 5.87 billion rupees, as per LSEG data.

Its revenue from operations fell 7.4% to 94.30 billion rupees.

The company also approved a fund raise of up to 50 billion rupees.

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KEY CONTEXT

Jindal Stainless' standalone sales grew 5.4% year-on-year in the quarter to 578,143 tonnes. However, the sales growth was mainly backed by domestic market as the share of export in company's total sales fell from 17% last year to 10% this quarter.

Exports were affected by the Red Sea tensions, which extended transit times and freight costs, and also caused a shortage of containers, the company said in a statement. It also flagged concerns about cheap imports from China and Vietnam flooding the Indian market which has been plaguing the sector for the past few quarters.

PEER COMPARISON

Valuation (next Estimates (next Analysts' sentiment

12 months) 12 months)

RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div

DA growth growth rating analysts price yield

(%) (%) * target** (%)

Jindal 15.55 9.70 19.89 28.80 Buy 8 0.96 0.24

Stainless

Jindal Steel 13.97 8.07 14.40 17.03 Buy 24 0.95 0.21

And Power

Tata Steel 12.06 7.67 4.80 127.10 Hold 28 0.98 2.21

Steel 14.68 7.76 5.61 8.35 Sell 11 1.18 0.85

Authority of

India

* 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

-- $1 = 83.6930 Indian rupees

(Reporting by Ashish Chandra in Bengaluru; Editing by Varun H K)