Down 33 per cent: Can this multibagger iron & steel stock rebound with mega capex plan of Rs 1,310 crore, net debt free and FIIs increasing stake?

FIIs increased their stake to 4.62 per cent in February 2024 compared to 1.62 per cent in December 2023.

The stock market started the day in green with the BSE Sensex Index up 0.57 per cent and the NSE Nifty-50 Index up by 0.41 per cent. On the broader markets, the indices were trading down with the BSE Mid-Cap Index down by 0.38 per cent and the BSE Small-Cap Index down by 1.09 per cent.  

JTL Industries Ltd, a small-cap company in the iron and steel sector, stood out in a mixed market today. The shares of the company saw a spurt in volume by more than 1.40 times on BSE. In just 13 days, the stock price has plunged a significant 33 per cent from its 52-week high of Rs 276.60 per share, reaching an intraday low of Rs 185.60 per share today. One of the reasons for the dip in the stock is basically due to the sudden fall in the small-cap index.

JTL Industries Ltd, a leading manufacturer in India, supplies steel tubes, pipes, and related products. Their offerings include ERW pipes, galvanized pipes, and even solar structures. Operating across various industries like infrastructure and energy, JTL boasts a wide client base including Tata Power, Ashok Leyland, and Siemens. With a current capacity of nearly 590,000 MTPA and plans to expand to 1 million MTPA by 2025, they are continuously focusing on increasing the production of value-added products.

JTL Industries Limited (JTL) is experiencing a period of significant growth and financial strengthening. They have achieved two major milestones: becoming debt-free by repaying all outstanding term loans and staying on track for receiving new technology (DFT machines) in the next quarter. This DFT technology will allow JTL to manufacture larger pipes and introduce hundreds of new products, boosting their capacity (current capacity of 6 lakh metric tonnes per annum) and product range. JTL also achieved record-breaking sales of 1,00,905 MT in Q3FY24, a 76 per cent year-over-year increase. This momentum is further amplified by a 62 per cent YoY jump in year-to-date performance, exceeding their entire FY23 volume in just 9 months. To capitalise on this success, JTL is investing Rs 1,310 crore in a major expansion project that will solidify its position as a leader in the structural steel market.

The shares of the company have double treated with bonus shares and stock splits. The shares of the company ex-traded stock split from Rs 10 to Rs 2 on October 13, 2021, and bonus shares ex-traded in the ratio 1:1 on September 07, 2023. Additionally, FIIs increased their stake to 4.62 per cent in February 2024 compared to 1.62 per cent in December 2023.

Today, shares of JTL Industries Limited plunged 2.70 per cent to Rs 187.65 per share from its previous closing of Rs 192.85 with an intraday high of Rs 203.95 and an intraday low of Rs 185.60. The stock’s 52-week high is Rs 276.60 and its 52-week low is Rs 142.75. The stock gave multibagger returns of over 450 per cent in 3 years and a whopping 1,300 per cent in 5 years.

According to Quarterly Results, the net sales increased by 65.26 per cent to Rs 567.35 crore and net profit increased by 47.24 per cent to Rs 30.18 crore in Q3FY24 compared to Q3FY23. According to the nine-month results (9MFY24), the net sales increased by 46.1 per cent to Rs 1,574.3 crore and net profit increased by 56.1 per cent to Rs 83.5 crore in 9M FY24 compared to 9M FY23. The net sales increased by 15 per cent to Rs 1,547 crore and net profit increased by 48 per cent to Rs 90 crore in FY23 compared to FY22.

Are you holding this stock in your portfolio and whether you anticipate it will rebound to its 52-week high price? Do let us know your thoughts in the comments below

Disclaimer: The article is for informational purposes only and not investment advice.