1:2 Stock Split: Record Date For Sub-Division To Be Declared; 38% Upside Seen - BUY?

With a combined production capacity of 0.59 million MTPA devoted to structural steel tubes and pipes, JTL Industries Ltd. (JTL), a major player in the industry, operates a total of four manufacturing plants located in the states of Punjab, Chhattisgarh, and Maharashtra.

JTL Industries Stock Split

The Board of Directors considered and declared "sub-division/split of 1 (one) Equity Share of the Company having face value of Rs. 2/- each into 2 (Two) Equity shares of the Company having face value of Rs.1 each, subject to the shareholders' approval, to be obtained in the ensuing extra-ordinary general meeting and such other approvals as may be required. In this regard, the record date for such division/ split shall be intimated to the stock exchanges in due course," said JTL Industries in a stock exchange filing on October 03.

JTL Industries informed stock exchanges that the rationale behind the sub-division of shares is to improve the liquidity of the company's shares in the capital market and to make it more affordable/accessible for small/retail investors.

Capex To Stimulate Growth; Value-Addition To Aid Margins

"JTL Industries Ltd (JTL), a prominent player in the structural steel tubes and pipes sector, has ascended as the fastest-growing company propelled by robustsectoral dynamics, augmented production capacities, and a strong offtake facilitated by an extensive network of distributors, dealers, and clients (both within the nation and overseas). Further, its strategic decision to prioritize the value-added product segments and to set up facilities near raw material suppliers(in conjunction with backward integrated plants) has proven to be effective, yielding an industry-leading EBITDA/ton. Ahead, the company is expected to sustain its notable growth trajectory, driven by its objective to expand its capacity to 1.0mn MTPA in FY25, with plans to more than triple the existing capacity over the next three years," the research analysts of SMIFS LIMITED said.

"The overarching aim is to triple the sales volume on FY24 figure. Moreover, JTL is embracing advanced Direct Forming Technology (DFT), which is anticipated to facilitate the company's expansion of SKUs towards innovative value-added products in a more efficient manner, in-turn, notable rise in EBITDA/ton and profitability with better product mix. Having said that, the most noteworthy aspect is that the funds are largely in-place for the imminent expansion, thanks to the recently concluded QIP, and warrants issued over the past few years. Thus, the balance sheet to remain streamlined. Given strong outlook, we initiate with BUY," the brokerage addes.

JTL Industries Share Price Target

"We possess a strong belief in the long-term business potential, supported by strong industry demand, the expansion in capacity, healthy revenue visibility, enhancing EBITDA/ton, a streamlined balance sheet and efficient working capital days. At CMP, the stock is trading at 20.3x Sept'26 EPS. We value the stock at 28x Sept'26 Est. EPS and arrived at TP of Rs294/share. "Initiating with BUY"," said the research analysts of SMIFS Ltd.

At the current market of Rs 212, the target price of Rs 294 indicates a potential upside of 38% for the shares of JTL Industries.

Disclaimer

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