Jindal Saw sinks 8% despite solid Q4; tech chart shows support at Rs 491

Jindal Saw stock strategy: On a consolidated basis, Jindal Saw reported a jump of 61.5 per cent Y-o-Y in net profit at Rs 480.4 crore in Q4FY24

Jindal Saw stock price sank 7.8 per cent to Rs 523.7 apiece on the BSE on Wednesday as investors booked profit in the counter post healthy March quarter (Q4FY24) results.

At 11:00 AM, the stock was trading 5 per cent lower at Rs 539 per share as against 0.5 per cent dip in the benchmark S&P BSE Sensex.

During the recently concluded quarter, Jindal Saw reported a standalone net profit of Rs 529.1 crore, up 48 per cent year-on-year (Y-o-Y) as against a net profit of Rs 357.3 reported in Q4FY23.

For the whole FY24, the company reported a massive 126 per cent Y-o-Y jump in PAT at Rs 1,614.1 crore.

On the operational side, total standalone income climbed 7 per cent Y-o-Y in Q4FY24 to Rs 5,006.1 crore, while it advanced 16.1 per cent for the entire FY24 to Rs 18,233 crore.

Ebitda, meanwhile, increased 44.4 per cent on year to Rs 972.5 crore for Q4FY24, and 76.6 per cent for FY24 to Rs 3,226.1 crore.

"During FY24, the company witnessed the strongest-ever performance in operations including the execution of large orders across all products. During the year, the company completed the acquisition of Sathavahana Ispat Limited (SIL) successfully. The company reported healthy growth in volumes due to additional capacities available after the acquisition and merger of SIL operations, improved execution of large export orders which resulted in higher turnover and margins. Further, the range bound raw material prices and value-add product mix contributed towards margin improvement across all products," the management said in a statement.

The current order book of Jindal Saw (for Iron & Steel pipes and pellets) stands at $1.53 billion, up from $1.49 billion in Q3FY24.

"Nearly 30 per cent of the order book is from exports where, apart from the traditional demand in the oil and gas sector, the additional demand for exports is coming from the water sector, which is primarily due to the increased focus of various countries on urbanisation and smart city development in this region. The order book gives a visibility of approximately three quarters, even though few orders may be executed in the next 9-12 months period. We expect the business scenario to remain positive in the coming quarters despite the volatile geopolitical situation in the MENA and GCC region," the management added.

That apart, Jindal Saw Gulf LLC (UAE Subsidiary) has an order book of $205 million, which is in addition to the orders book of $1.53 billion mentioned above.

On a consolidated basis, Jindal Saw reported a jump of 61.5 per cent Y-o-Y in net profit at Rs 480.4 crore in Q4FY24. For the entire financial year, the rise in PAT was 252.6 per cent to Rs 1,593 crore.

Tech View

Over the past one month, Jindal Saw stock price has moved up around 14 per cent on the BSE. The stock, however, dropped today, May 8, after it tested the upper end of the Bollinger Band (Rs 596) on May 7 with an intraday high of Rs 598.

The fall may find support at Rs 524, which is the stock's 20-day moving average (20-DMA) on the daily chart. This may be followed by a support at Rs 491, the stock's 20-WMA; and Rs 487 -- 50-DMA.

While the moving averages have bullish crossovers, momentum oscillators such as MACD and Fast Stochastic show exhaustion in rally.