JTL Industries Gets Buy Call For A Revised Target Price of Rs 325 After Q2 Sales Volume

JTL Industries has received a buy call from a leading brokerage firm Nuvama Wealth after the company declared positive business updates in Q2FY25. The brokerage has maintained a 'BUY' with a revised target price of Rs 325 (earlier INR303) compared to a current market price of Rs 243.

In the second quarter of the current fiscal year, JTL Industries earned its highest-ever sales volume, the firm announced in an exchange filing on October 1. In Q2FY25, the sales volume increased to 1.03 lakh MT, a 26.32 percent increase over the 81,686 MT realised during the same time in the previous fiscal year. According to the company, JTL's sales volume in the first half of FY25 was 1,99,593 MT, up 25.49 percent from 1,59,028 MT in the same time last year. According to the announcement, export sales increased in H1FY25, rising from 8,897 MT in the same time last year to 18,219 MT.

Commenting on the key business updates of JTL Industries in Q2FY25, the research analysts of Nuvama Wealth said, "JTL reported substantial Q2FY25 sales volumes at 0.1mn ton, up 7% QoQ/26% YoY. Excluding inorganic expansion (Naba), growth was 5.5% QoQ/11% YoY, which aligns with the leader. The key is exports, which clocked > 200% growth on the back of the recent commissioning of the Maharashtra galvanised unit, which being closer to the port attracts higher exports. YoY growth of 15% in the domestic market was also strong despite falling HRC prices leading to destocking."

Commenting on the target price of JTL Industries, the research analysts of Nuvama Wealth said "We believe EBITDA/ton for JTL would stay above INR4,000/tonne in Q2FY25, given inventory losses are likely to be offset by better margins in exports; maintain 'BUY' with a revised TP of INR325 (earlier INR303) as we roll forward valuations to Q2FY27 EPS valuing at 25x."

In Q2FY25, JTL recorded sales volume of 103,193 mt, which included volumes from Nabha. This is a 26.3% increase over the 81,686 mt of growth recorded in Q2FY24, mostly due to the robust demand for heavy constructions. Sales volume for H1FY25 were 1,99,593 metric tonnes, a strong increase of 25.5% above 1,59,028 metric tonnes in H1FY24. This increase demonstrates the ongoing impetus for growing operational capacity and market share. At 14,447mt, exports increased at a strong 229% YoY/144% QoQ rate. The recent inauguration of a Maharashtra galvanised factory, which is closer to the port and is drawing exports, was the driving force behind the rise. For H1FY25, exports accounted for around 9.13% of total sales volume.

JTL Industries Limited is the primary business of the Jagan Group of Companies, having been founded in 1991. JTL specialised in producing black pipes for ERW systems. Value-added products such as solar module mounting structures, hot-dipped galvanised steel tubes and pipes, and large-diameter steel tubes and pipes have been added to the company's portfolio. With more than 1,000 SKUs and a network of more than 800 dealers and distributors, JTL offers a wide selection of products. Four cutting-edge manufacturing facilities strategically located throughout India are home to the company: two in Punjab (Derabassi and Mandi Gobindgarh), one in Maharashtra (Mangaon), and a newly added factory in Chhattisgarh (Raipur). The firm serves continents including Europe, Africa, Asia, Australia, and North America, and it is present across India.

Disclaimer

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