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JINDALSAW - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.7
📊 Financial Overview
- Profitability: PAT dropped sharply from ₹364 Cr to ₹79.3 Cr QoQ, reflecting a significant earnings contraction.
- Return Metrics: ROE at 17.4% and ROCE at 20.9% are strong, indicating efficient capital deployment.
- Valuation: P/E of 8.11 is well below the industry average of 24.0, suggesting undervaluation.
- P/B Ratio: With a book value of ₹192 and price of ₹176, P/B is ~0.92, indicating the stock trades below intrinsic value.
- PEG Ratio: 0.12 reflects strong growth potential relative to earnings.
- Debt Profile: Debt-to-equity ratio of 0.28 is conservative, supporting financial stability.
- Momentum: RSI at 28.0 and MACD at -7.55 indicate oversold conditions and potential for technical rebound.
🏢 Business Model & Competitive Edge
- Jindal SAW is a leading manufacturer of large-diameter pipes used in energy and water infrastructure projects.
- Strong export presence and backward integration in steel manufacturing enhance cost efficiency.
- Well-diversified product portfolio across ductile iron, seamless, and welded pipes.
💡 Entry Zone Recommendation
- Current price is below both DMA 50 (₹200) and DMA 200 (₹228), indicating a bearish trend.
- Suggested Entry Zone: ₹165–₹175 for accumulation.
- Long-term holding is favorable if earnings normalize and infrastructure demand remains strong.
✅ Positive
- Attractive valuation with low P/E and P/B ratios.
- Strong ROE and ROCE indicate efficient operations.
- FII holdings increased by 0.23%, showing renewed foreign interest.
⚠️ Limitation
- Significant QoQ PAT decline (-83.4%) raises concerns about earnings volatility.
- Stock is in a downtrend with weak momentum indicators.
- DII holdings declined by 0.42%, reflecting cautious domestic sentiment.
📉 Company Negative News
- Sharp drop in quarterly profits suggests margin pressure or one-off impacts.
- Stock has corrected nearly 50% from its 52-week high of ₹343.
📈 Company Positive News
- Strong return ratios and low leverage support long-term fundamentals.
- PEG ratio of 0.12 indicates undervaluation relative to growth potential.
🏭 Industry
- Pipe manufacturing benefits from infrastructure expansion and oil & gas pipeline investments.
- Industry P/E of 24.0 highlights Jindal SAW’s relative undervaluation.
🧾 Conclusion
- Jindal SAW is fundamentally strong with attractive valuation and high return metrics.
- Entry near ₹165–₹175 offers a favorable risk-reward for long-term investors.
- Monitor earnings recovery and volume trends for confirmation of reversal.
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