In Wednesday’s trading session, the shares of one of the leading steel stock specialised in manufacturing of steel pipes, tubes, and a range of other steel products jumped upto 8% percent following the acquisition of 31.20 percent stake in ReNew Green Energy Solutions Private Limited.
Price action
With a market capitalization of 19,770 Crores on Wednesday, the shares of Jindal Saw Ltd jumps upto 7.7 percent after making a high of Rs 333 compared to its previous closing price of Rs 309.20.
What happened
Jindal Saw Ltd has entered into a Share purchase agreement with ReNew Green Energy Solutions Private Limited (RGES) to acquire a 31.20% equity stake at face value in ReNew Green MHH One Private Limited (RGMHH).
ReNew Green MHH One Private Limited (RGMHH) is in the renewable energy sector and is focused on power generation from renewable sources and was incorporated in 2021, though it has not yet started operations.
The objective of the agreement is to procure electricity at a concessional rate and it involves a cash consideration for the shares, which will be acquired at face value.
About the company
Jindal Saw Ltd one of the leading steel stock specialised in manufacturing of large diameter Submerged Arc Welded (SAW) pipes, tubes, and a range of other steel products, serving industries such as oil & gas, water and infrastructure.
They are renowned for its advanced manufacturing capabilities and extensive product portfolio, including seamless and welded pipes, and has a strong presence in sectors such as energy, construction and irrigation.
The company operates in both domestic and international markets, offering products that meet global quality standards.
Key Insights of company
The Company’s P/E ratio is 10 which is lower than the industry average P/E of 37.23 and the company has achieved an Average 3 Year Revenue growth of 16.37 percent along with its PEG ratio being 0.04 which suggests that the stock might be undervalued.
Financials
The company’s revenue rose by 18.7 percent from Rs 5,488.88 crore to Rs 5,602.3 crore in Q2FY24-25. Meanwhile, Net profit rose from Rs 375.73 crores to Rs 499.61 crore during the same period.
Key Financial ratios
Jindal Saw Limited has an impressive Return on Equity (RoE) of 18.11 percent and a Return on Capital Employed (RoCE) of 19.72 percent. Furthermore, the company’s debt-to-equity ratio is 0.51.
Written by Sridhar J
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