Q2 Results Underperformer: Stock falls 18% in three sessions after profit drops nearly 70%

Shares of Jindal Saw Ltd. declined for the third consecutive trading session on Thursday, October 22, falling 7.3% intraday, taking the stock’s cumulative decline to around 18% over three sessions.

The stock had ended Wednesday’s session 8.5% lower and fell around 2% on Monday. Markets were shut on Tuesday for a holiday.



The selling pressure comes after the iron and steel pipe manufacturer reported a sharp decline in September-quarter earnings on Friday, October 16.

Jindal Saw reported a 69.03% year-on-year decline in consolidated net profit

attributable to owners to ₹47.04 crore in the September quarter from ₹151.89 crore in the year-ago period.

Revenue from operations rose 5.63% year on year to ₹4,471.79 crore. However, total expenses increased 10.13% to ₹4,505.22 crore, outpacing revenue growth.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell 42% year on year to ₹261 crore from ₹451 crore. EBITDA margin contracted sharply to 5.8% from 10.7% a year earlier.

The earnings pressure was also visible sequentially. Net profit attributable to owners declined 54.84% from ₹104.17 crore in the June quarter, while revenue edged up 0.44% to ₹4,471.79 crore.

Consolidated profit after tax, including the share attributable to non-controlling interests, fell 74.54% year on year to ₹35.28 crore. Earnings per share declined to ₹0.74 from ₹2.38 in the corresponding quarter last year.

Meanwhile, Brickwork Ratings reaffirmed its ‘BWR AA/Stable’ rating on Jindal Saw’s ₹500 crore non-convertible debenture issue. The rating agency said the instruments carried a high degree of safety regarding timely servicing of financial obligations and very low credit risk.

Shares of Jindal Saw were trading 7.4% lower at ₹250.3 on Thursday. The stock has declined over 12% in the last one month. The three day fall has led to the stock trimming its year-to-date advance down to 50%.

The stock is currently trading around 21.5% below its 52-week high of ₹320, while remaining 64.3% above its 52-week low of ₹153.