Sunday, May 21, 2017

JSW Steel Ltd - Buy on declines

Company Background:

JSW Steel Limited is a holding company. The Company is engaged in the business of production and distribution of iron and steel products. Its segments include Steel; Power (used mainly for captive consumption), and Others, which includes cement, mining and construction activities. 

Its product portfolio in flat and long steel products includes hot rolled (HR) coils, sheets and plates; cold rolled coils and sheets; galvanized products; galvalume products; non-grain oriented electrical steel (CRNGO); pre-painted galvanized products (color coated sheets/coils); pre-painted galvalume products; wire rods; special steel bars/wires; rounds and blooms, and angles. 

Its color coated products include JSW Pragati, JSW Colouron and JSW Colouron+. Its galvanized products include JSW Vishwas and GALVOS. It has plants in over six locations in India, including Vijayanagar in Karnataka, Salem in Tamil Nadu, and Tarapur, Vasind, Kalmeshwar and Dolvi in Maharashtra.

Stock Performance:

During the last one month high.week the scrip has given a low 3.8% return jumping from 185 to 207.  It has resistance above 200 and closure beyond 200 would put in bullish orbit

Recommendation :

JSW is one of the best stock in the Metal sector. The scrip has been outperforming peers in the metal sector showing good strength.

Sound financial management, good fundamentals, and great revenue visibility make it a compelling buy.  Barring these minor aberrations, we expect the stock to rise to 225 levels in a months time frame.  The results announced recently were good showing good growth in revenue and earnings

Buy on declines of around Rs.185 and hold for a target price of Rs.250 holding period of 12 months

Research Analyst

Smart Investor -
Equity Research
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