Accumulate Jindal Saw – Religare

The Jindal group is planning to simplify the holding structure in its group companies, as a result of which we will see massive restructuring in the investment holding of all the group companies including Jindal SAW.

The exact structure of the restructuring scheme is still not known but any formal announcement on this front would be a key trigger for the stock in near future. The current market value of Jindal SAW’s investments is Rs22bn. Jindal Saw holds shares of group companies like Nalwa Sons, Jindal Stainless, JSW Steel, Jindal Steel & Power. Apart from these holdings its also holds 94% in Hexa securities, which holds shares in group companies like JSW Steel, Jindal Stainless, Jindal Steel & Power.

Its investments in group companies are valued at Rs195/share and its core pipe business at Rs856/shares, which implies a core business P/E of 10.0x 2-year forward earnings. Religare recommends a target price of Rs 1051 with an ACCUMULATE rating.