JTL Industries share price: Axis Securities sees 30% upside after 30% rally in YTD | Mint
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Business News/ Markets / Stock Markets/  JTL Industries share price: Axis Securities sees 30% upside after 30% rally in YTD
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JTL Industries share price: Axis Securities sees 30% upside after 30% rally in YTD

JTL Industries share price: Axis Securities believes that the stock may soon come out of the base building mode

JTL Industries share price has risen from ₹157 to ₹205 apiece levels in YTD time. (iStock)Premium
JTL Industries share price has risen from 157 to 205 apiece levels in YTD time. (iStock)

Despite continuous rally in Indian stock market, JTL Industries share price is under sell off pressure. JTL Industries share price today opened with a downside gap and went on to hit intraday low of 195 apiece on NSE. But, the stock witnessed buying at lower levels and regained 200 levels soon. 

This is not the first time, when JTL Industries share price has not moved in sync with key benchmark indices — Nifty 50, Sensex and Bank Nifty. In last one month, Bank Nifty index has surged 7.50 per cent, Nifty 50 index has risen around 7.90 per cent whereas Sensex has shot up over 7.15 per cent. But, JTL Industries share price shed over 8 per cent in this time. However, Axis Securities believes that JTL Industries shares would soon come out of the base building mode.

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The recently published Axis Securities stock pick report might be an attractive feed for bottom fishers as the brokerage has given buy tag to the stock predicting 265 per share target in medium to long term. JTL Industries share price today is around 205 per share on NSE, this means Axis Securities is expecting near 30 per cent appreciation in this scrip in medium to long term.

Why Axis Securities is bullish on JTL Industries shares?

On reasons that may fuel JTL Industries share price, the brokerage said, "The Indian structural tubes market has the potential to grow from ~13MT in CY23 to 22MT by CY30, led by the government’s thrust on developing infrastructure, which will result in a shift towards robust demand for structural steel. JTL is planning to expand its capacity from the current 0.586MT to 1MT by FY25 and it will be enhancing its VAP share from the current 31% in FY23 to 50% by FY25. JTL will add an additional 0.2MT capacity each at Mangaon and Raipur facilities by the end of FY25 and 14kt at Mandi (by Q1FY24) which will take its total capacity to 1MT by FY25. Out of the incremental 0.4MT capacity in the next two years, ~50% of the capacity will be equipped with DFT (Direct Forming Technology) which will facilitate the company to produce various sizes of hollow sections without roll change, increasing efficiency and capacity utilization. This will also add additional SKUs to the company’s portfolio. In the long term, JTL plans to add another 1MT capacity post FY25 which will bring its total capacity to 2MT by FY28."

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Highlighting the stable operating profits and returns of JTL Industries, Axis Securities said, "The company has stable operating profits and returns during the expansion phase. With the volume expansion Capex going on, the company’s ROE and ROCE are expected to moderate but would remain decent near 20% over FY24-26E (APL Apollo’s ROE/ROCE stood at 23.5%/29.2%)."

Brokerage gives 'buy' tag

On suggestion to stock market investors in regard to JTL Industries shares, Axis Securities said that one can buy this stock for medium to long term target of 265.

"The company has wide distribution reach through strategically located plants," Axis Securities conclued.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.

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Published: 06 Dec 2023, 12:01 PM IST
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