Brokerages Increase Target on Jindal Stainless After Recent Merger

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Brokerages Increase Target on Jindal Stainless After Recent Merger

By Aditya Raghunath -- On December 29, the boards of Jindal Stainless (NS: JIST ) (JSL) and Jindal Stainless Hisar Ltd (NS: JINA ) (JSHL) approved the merger of JSHL into JSL in a share swap ratio of 1:1.95.

Brokerage Emkay Global has recommended a buy on the merged entity with a price target of Rs 95. The stock ended December 31 at Rs 75.5. That’s an upside of almost 26%. ICICI Securities Ltd (NS: ICCI ) has given the stock a target of Rs 90, an upside of almost 20%. The recommendations are based on the financial heft that the JSHL balance sheet will add to the growth potential of JSL.

“The merger of JSHL in to JSL will induce a simplified capital structure, expanding the turnover of the merged business to Rs 20,000 crore. With 1.9 MTPA melt capacity, the merged entity will be the only Indian company in the league of top 10 stainless steel companies in the world,” said Abhyuday Jindal, Managing Director, JSL and JSHL.

For the September quarter, JSL reported sales of Rs 3,314.13 crore, up 0.7% from the same quarter in 2019. JSL reported profits of Rs 82.28 crore for the September quarter. The merger is expected to close in the second half of FY22.

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