Jindal Steel shares rose 75% from 52-week low; buy, sell or hold?

Shares of Jindal Steel & Power Ltd (JSPL) have risen 75% from their 52-week low. The Jindal Steel stock fell to a 52-week low of Rs 377.05 on August 23, 2022. Jindal Steel stock rose to a yearly high of Rs 700 on August 11, 2023. In the previous session, Jindal Steel stock ended 0.69% higher at Rs 659.80 against the previous close of Rs 655.30 on BSE. Market cap of Jindal Steel climbed to Rs 67,305.41 crore. A total of 0.50 lakh shares of the firm changed hands amounting to a turnover of Rs 3.29 crore on BSE.

In terms of technicals, the relative strength index (RSI) of Jindal Steel stands at 55.1, signaling the stock is neither oversold nor overbought. The stock has a one-year beta of 1.4, indicating very high volatility during the period. Jindal Steel stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day but lower than the 10 day moving averages.

In the last three years, the JSPL stock has rallied 195.08%. The stock has gained just 11.14% in 2023 but risen 68.64% in a year.

Here’s a look at what analysts said on the outlook of the Jindal Steel stock.

Abhijeet from Tips2trades said, "Jindal Steel looks slightly bearish on the daily charts with next resistance at Rs 662.3. A daily close above this resistance could lead to a target of Rs 720 in the near term. Support will be at Rs 633."

Aditya Gaggar Director of Progressive Shares said, “Jindal Steel and Power is in the primary uptrend with a higher top higher bottom formation and in the month of July 2023, the stock has given a breakout from the Flag and Pole formation (Monthly Time-frame). The stock moved in tandem with the market correction and has almost completed its pullback move to resume its uptrend. A reading of 30 in the trend-following indicator ADX indicates the presence of a strong uptrend. As per Flag and Pole formation, the target is Rs 825.”

Gaurav Bissa, VP, InCred Equities said, "Jindal Steel was seen consolidating in a range for a year before breaking out above Rs 620 levels on the weekly charts. The stock has witnessed some profit booking in the last few days and is approaching breakout retest levels at Rs 620. The stock is expected to witness some stability around Rs 620 which can push the stock back towards Rs 680-685 levels. RSI is currently trading around 60 and is expected to sustain above 45 levels which can ensure declines in the stock price are limited and overall trend remains strong."

Kotak Institutional Equities (KIE) has raised target price of Jindal Steel to Rs 740 from Rs 580.

“A sector-leading growth profile along with the strongest balance sheet makes a strong case for re-rating,” the brokerage firm said.

Kotak sees the next 12 months as a transformational period for JSPL as various projects are lined up for commissioning. JSPL’s capacity would increase by 65 per cent in two phases while higher backward and forward integration over FY2024-26E would structurally lift its margin profile.

"We estimate EBITDA and EPS CAGR of 19 per cent and 17 per cent and 33 per cent and 27 per cent over the next 3 and 5 years, respectively. A large part of growth capex should be met by internal accruals with net debt/EBITDA to peak at 0.8 times in FY2025E. A sector-leading growth profile along with the strongest balance sheet makes a strong case for re-rating," it said.

Consolidated profit fell to Rs 1692 crore in the three months ended June 30 from Rs 1990 crore a year earlier. Revenue slipped to Rs 12,643 crore in Q1 of this fiscal against Rs 13,069 crore in the June quarter of last fiscal. Operating profit or EBITDA slipped to Rs 2628 crore in the June 2023 quarter against Rs 3438 crore in Q1 the previous fiscal.

Also read: BHEL, Hindustan Aeronautics, Midhani: How should you trade these buzzing stocks?

Also read: Block deal: Coforge shares in focus as promoter may sell entire stake today