Shares of Jindal Stainless Ltd gained over 3% on Wednesday's trade after the company bought 49% stake in Indonesia-based nickel pig iron firm, New Yaking Pte, for about ₹1,233 crore on Tuesday.
As the company would have a stake in New Yaking Pte, the company claimed in an exchange filing that the strategic collaboration provides benefits of backward integration.
With an annual nameplate production capability of up to 200,000 metric tonnes of NPI with an average 14% Ni Content, the facility is expected to be operational in less than two years.
"This is the first-ever strategic partnership entered into by an Indian company for securing stake in nickel reserves globally as India is deficient in nickel ore," said the company in an exchange filing.
Brokerage Nuvama Research believes that this could either guarantee nickel's long-term availability or open up new income streams. The deal appears appealing because of the low investment and three to four-year payback time.
"Earnings before interest, taxes, depreciation, and amortisation (EBITDA) contribution could be 9-10% of overall EBITDA from FY26 onwards. This will reduce the pace of deleveraging, but will add new stream of revenue. Retain ‘buy’ with a target price of ₹346," said the brokerage in its report.
The stock gained 200.79% from a 52-week low recorded on March 8 this year, and the stock price rose 52% and outperformed its sector by 59.3% in the past year.
According to analysts , technically , prices recently corrected along with the broader markets, and now trading around the support levels, 260 - 270 is the buying zone, and 315 - 330 is resistance.
As per Mintgenie poll, 8 analysts recommend 'buy' rating on the stock.