JINDAL SAW: FULLY INTEGRATED INFRASTRUCTURE PROXY
Jindal Saw - LTP 139 (As on 02.08.2021)
Jindal SAW Ltd. is the market leader capacity wise in manufacturing of large diameter Submerged Arc Welded (SAW) Pipes using U-O-E, J-C-O and Helical processes. The SAW Pipes are mainly used in transportation of Oil, Gas, Slurry and Water.
The first SAW Pipe mill (UOE) was commissioned in the year 1987 in Kosi Kalan, Uttar Pradesh. With the opening of this mill, Jindal SAW Ltd. became the first Pipe mill to produce LSAW Pipes in India.
Jindal SAW Ltd. has manufactured and supplied more than 36,000 kms of Line pipes & exported in excess of 17,000 Kms of Line pipes for on-shore and off-shore pipeline projects across the world. This division 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 Asia.
- Jindal Saw is the only company in the world that provides Total Pipe Solutions
- Jindal Saw is 2nd largest Pipe exporter in Asia Pacific region
- It is 3rd largest producer of DI Pipes in the world
- Jindal Saw has shown a big margin expansion aided by Higher Realisation.
Stock is bullish after Spectacular Q1 Results
Q1 Result Highlights: Q1FY22 vs Q1FY21
▪️ Volumes at 0.62 MT vs 0.39 MT (+59% YoY)
▪️ Realisation/T came at 38740 cr vs 34214cr (+13.2% YoY)
▪️ Revenue at 2417cr vs 1346cr (+80% YoY)
▪️ EBIDTA at 355cr vs 151cr (+135% YoY)
▪️ EBITDA Margin came at 14.7% vs 11.2% (+350bps YoY)
▪️ PAT at 146cr vs loss of 27cr
▪️ EPS of 4.78 vs (0.29)
FY22E EPS of 25 easily achievable as Q4 is always peak performance quarter and co has already delivered superb performance during Q1.
Co trades at just 5.5X FY22E EPS
▫️Jindal Saw is the market leader capacity wise in manufacturing of large diameter Submerged Arc Welded (SAW) Pipes
▫️Jindal Saw also provides relevant, value-added services by way of specialized internal and external Anti-Corrosion Coatings, Connector Casings, Hot Pulled Induction Bends etc
▫️Co has 8 state of the art Pipe manufacturing plants under operation
▫️Exports to more than 40 countries
Co has exported approx 17000 KM of higher API grade pipes & has the highest customer reach by any Indian Pipe manufacturer
▫️ Co is backward integrated as it has Iron Ore mines in Rajasthan
▫️ The Integrated Greenfield project of Ductile Iron pipe & Pig Iron is located close to Mundra & Kandla ports
Products:
- Saw Pipes
- Ductile Iron Pipes & Fittings
- Carbon, Alloy,
- Stainless Steel Pipes & Tubes
- Pellets
Even at a conservative P/E of 12x, stock price will reach 300 or even more
Jindal Saw deserves a P/E of at least 15x. TP at 15 P/E comes to Target Price of Rs. 375/-
Market Experts are bullish on Jindal Saw stock at CMP and advise a STRONG BUY
**Above Post is subject to market conditions. Personal due diligence advised
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