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  4. Multibagger metal stock reports over 34% rise in Q2 profit as domestic steel prices get support by demand

Multibagger metal stock reports over 34% rise in Q2 profit as domestic steel prices get support by demand

Despite the global steel market's unpredictability, Indian steelmakers are expected to perform well due to increased infrastructure development, urbanization, and favorable policy reforms boosting domestic steel demand.

Edited By: Nitin Kumar @Niitz1 New Delhi Published on: October 16, 2023 8:56 IST
Indian steelmakers
Image Source : PEXELS Black and white picture of machinery at a construction site

The steel industry was impacted by the volatility in the global environment, which affected the demand-supply balance and resulted in volatility in steel prices. However, the increased infrastructure development, urbanisation and supportive policy reforms have pushed the demand for steel. ICICI Securities in a report said that despite the global steel environment remaining nebulous, the Indian steelmakers are likely to fare well as domestic demand is likely to be supportive in the pre-election period and imports may stay relatively subdued.

It said that the sector outlook is positive and that further price hikes are likely as producers attempt to pass on the higher raw material cost.

As domestic steel prices are well supported by demand, steel pipes maker JTL Industries has reported a 34.1 per cent rise in consolidated profit at Rs 27.91 crore in the second quarter (July-September) quarter of the current fiscal, according to a PTI report.

The report said that the total income during the quarter increased to Rs 505.12 crore from Rs 366.99 crore in the year-ago period. 

The small cap stock which has a market cap of Rs 4.20 thousand crore, as per NSE, has advanced around 70 per cent in a year and produced multibagger return of more than 150 per cent in two years.

Meanwhile, brokerage house Axis Securities said that JTL is on its path to enhancing its capacity by FY25. It has given buy rating for a target of Rs 265, saying the value added products (VAP) share target is 40 per cent in this financial year and 50 per cent in the next. 

During Friday's trading session, JTL Industries shares settled at Rs 246 as it climbed more than 4 per cent. A leading producer of electric resistance welded steel pipes, the firm has a production capacity of more than 6 lakh metric tonnes per year.

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