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BROKERAGE RECOMMENDATIONS

Monday, October 09, 2017

Niveshpicks.com calls a 'Buy' on JTL Infra Ltd.
CMP:  84    Target: 250


JTL Infra Limited is the flagship company of the Jagan Group. The corporate office of the company is located at Chandigarh and the steel mill is located at Dera Bassi, Punjab, India.

PRODUCTS: JTL produces Black & Galvanized ERW Steel Pipes & Tubes, hollow sections and structural steel that are extensively used in major engineering and construction projects.

They have a large scale unit engaged in manufacturing and exporting galvanized steel tubes / pipes and welded black pipes/tubes and Electro galvanized Steel tubes/pipes.

Scaffolding Fittings And Systems: They manufacture and export wide range of Scaffolding Fitting, Scaffolding Fitting Systems and accessory including Cold Pressed Steel Scaffolding and Drop Forged Fittings. All these products are designed to be compatible with standard scaffold tubes.

Hollow Sections: They manufacture and export hollow sections, structural hollow sections, hollow steel sections, square /rectangular hollow sections, round hollow sections, mild steel black ERW square tubes, rectangular tubes & round hollow section tubes and hot rolled steel sections as per customer’s requirement. T

LTZ Sections: The company have a large scale unit engaged in manufacturing and exporting LTZ Sections and other steel products like Galvanized Steel Pipes, Black Steel Pipes and ERW Black Pipes. They manufacture steel tubes for diverse structural applications and mechanical & general engineering purpose.

Mild Steels Angles/Channels
The company manufacture and export mild steel angles, mild steel channels, MS angles and channels, mild steel structure mainly angles and channels for various purposes.

Industry: India was the world’s third-largest steel producer. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. India’s steel exports rose 142% in 2017 to 747,000 tonnes over 2016, while imports fell by 23% to 504,000 tonnes in 2017 over 2016. Total consumption of finished steel grew by 3.4% year-on-year at 6.015 MT during 2017.  

During the year, companies’ production of G.I. Pipes has been increased from 16479.193 M.T to 19095.030 M.T, whereas the production of Black Pipes has been decreased from 3742.045 M.T to 2967.09 M.T. Trading export of the Company has also increased during the previous year from 917.175 M.T to 1013.245 M.T. During the year company has also started manufacturing of Solar Structure and made a sale of 1502.149 M.T. Total turnover of the Companies (gross & net) has been increased from Rs. 10500.95 Lakhs approx.to Rs. 12282.12 lakhs approx. & Rs. 9486.55 Lakhs to Rs. 11274.67 Lakhs respectively Overall profit of the company during the year has been also increased from Rs. 121.17 Lakhs approx. to Rs. 137.61Lakhs approx.

SUMMARY:

  •     The company is in expansion mode and capacity of the company will double in current FY
  •     The turnover of the company for the current FY is expected to be at 150 crore
  •     The company is expected to post a net profit of 8-9 crore for the current FY
  •     EPS for Q1 was at 1.03 Rs and expect the overall EPS for the entire FY to be at 8-9 Rs
  •     Post Expansion the estimated turnover and net profit for 2019 is expected to be around 200 crore in topline and 11 crore in bottomline and for 2020 300 crore in topline and 15 crore in bottom line
  •  EPS for FY 18- 19 is expected to be around 11 Rs & for FY19-20 it is expected to be around 15 Rs
  •     The share are currently available at PE of 7 X  2019 earnings  & 5 X 2020 earnings, while the PE of the industry is at 30 times. Going by the scenario the share is looking very attractive.
     
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