Shares of Jindal Steel and Power shot up more than 5.5% to hit their highest level in over a month after Kotak Securities bumped up the stock to a “buy” rating.
What Happened? Analysts at Kotak upgraded Jindal Steel’s stock to “buy” from “reduce” and also hiked its target price to ₹740 from ₹580.
Analysts at the brokerage said the steel producer had a “sector-leading growth profile” and the “strongest balance sheet” among its peers. They also see a 36% upside from the stock’s last close of ₹544.20 and the potential of 100% returns in three years.
The brokerage said the company's freshly announced expansion projects, totalling about ₹24,000 crore, will gradually be commissioned from October 2023, improving margins and aiding earnings from the second half of FY24. They will also help in volumes and the upgrade of product mix.
At the same time, Jindal Steel’s net debt levels stay within reasonable limits, the brokerage added.
Price Action: Jindal Steel shares were 5.62% higher at 575.20 in afternoon trade on Monday.
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