Shares of Jindal Stainless, one of the largest manufacturers of stainless steel flat products, jumped 8.4% to ₹304 apiece on the BSE during Thursday's trade, even after the company's Q4 numbers came in lower.
The stainless steel maker on Wednesday posted a 20% fall in its consolidated net profit to ₹716 crore from ₹895 crore recorded in the same quarter of last fiscal.
However, on a sequential basis, the net profit increased by 39.57%.
The consolidated revenue from operations witnessed a marginal 5.22% YoY growth to ₹9,803 crore. Its operating profit in Q4 fell by 21.70% YoY to ₹917.56 crore, compared to ₹1,172 crore registered in the same quarter of the previous fiscal year.
The company's profitability was impacted by the high raw material costs. In Q4FY23, the company experienced a significant increase in raw material costs, amounting to ₹7,247.3 crore compared to ₹6,368.29 crore in Q4FY22.
For the fiscal year ended March 31, 2023, the company's consolidated net profit stood at ₹2,084 crore, an increase of 47.74% as compared to ₹1,909 crore in FY22. Revenue from operations for FY23 came in at ₹35,697 crore as compared to ₹21,223 crore in FY22.
The company's board has approved a dividend of ₹1.50 per equity share with a face value of ₹2 each for the financial year ended March 31, 2023. This dividend announcement follows the approval of a special interim dividend of ₹1 per equity share a month ago, upon the completion of the merger, resulting in a total dividend payment of ₹2.50 per equity share.
“With the revocation of export duty, the company ramped up export sales in Q4 FY23 and consequently delivered the highest-ever quarterly sales volume of 507,632 MT. Net debt in the financial year stood at ₹2,591 crore, and the net debt-to-equity ratio improved to 0.2 despite the completion of organic CapEx,” the company said in an exchange filing.
Subsidised and substandard foreign imports continued to distort the level playing field against Indian manufacturers, especially MSME producers. Specifically, imports from China and Indonesia witnessed a steep increase of 318% and 158%, respectively, from FY21 to FY23, the company added.
The company said that it entered into a collaboration agreement with New Yaking Pte Ltd. for a 49% stake in their Nickel Pig Iron (NPI) smelter facility in Indonesia. This first-of-its-kind move by an Indian entity will ensure the long-term availability of nickel ore for the company, it said.
Further, the company also said it signed an MoU with the Confederation of Indian Industries (CII) to help scale up the corrosion mitigation movement in India, and improve the life expectancy, safety, and reliability of public infrastructure.
Jindal Stainless is a small-cap stock with a market capitalization of ₹24,641 crore. The company is one of the leading manufacturers of stainless steel (SS) in India, with integrated melting products.
The company's shares have been performing exceptionally well in the last one-year period, rewarding their shareholders with nearly 95% returns. From its 52-week low of ₹95 apiece, the stock zoomed over 215% to ₹304 apiece.
8 analysts polled by MintGenie on an average have a 'buy' call on the stock.
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