(Reuters) -India’s Jindal SAW, a manufacturer of steel pipes for the energy, transportation and water sectors, reported a decline in first-quarter profit on Tuesday, weighed down by lower domestic demand amid a slowdown in construction activity.
Consolidated net profit after tax dropped 3.9% to 4.24 billion rupees ($48.3 million) in the three-month period ended June 30.
Revenue from operations fell about 17.3% to 40.85 billion rupees.
For further earnings highlights, click.
KEY CONTEXT
The April-June quarter witnessed weak demand for steel pipes as early onset of monsoon dampened construction activity, causing delays in various projects. India’s industrial output during April-June grew marginally by 2%, compared with an increase of 5.4% last year.
Additionally, tighter money supply reduced liquidity for dealers and contractors, weakening their purchasing capacity, according to two analysts.
The company’s iron and steel pipes sales dropped 19% year-on-year to 326,000 million tonnes in the quarter.
Its peer, APL Apollo Tubes reported a higher quarterly profit, but lowered its full-year volume growth outlook due to weak demand, early monsoon, and weak exports due to geopolitical tensions.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth rating* analyst price yield
(%) s target** (%)
Jindal SAW 6.44 4.55 25.16 14.64 Strong 3 0.60 0.97
Buy
APL Apollo Tubes 34.10 23.23 16.30 40.67 Buy 13 0.89 0.36
Ratnamani Metals 25.42 17.58 13.84 22.11 Strong 4 0.77 0.54
and Tubes Buy
Welspun Corp 15.40 10.31 25.23 7.63 Strong 4 0.81 0.56
Buy
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG IBES
— $1 = 87.8100 Indian rupees
(Reporting by Anuran Sadhu in Bengaluru; Editing by Sherry Jacob-Phillips)
