Axis Securities sees 30% upside in this multibagger stock - Do you own it?

Multibagger Stock: Shares of JTL Industries Ltd jumped around 4.65 per cent today i.e. on December 7, to trade at Rs 209.50. However, the scrip ended the session at Rs 204.60. Earlier in the day, the counter opened gap up with gains of nearly 2 per cent at Rs 204.95 apiece on the BSE. The counter had closed at Rs 200.20 in the previous session. 

On technical parameters, the counter is trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. 

JTL Industries: Buy, Sell or Hold?

Axis Securities has given a BUY rating on JTL Industries. The brokerage is expecting nearly 30 per cent appreciation in the counter in the medium to long term. 

According to Axis Securities, the Indian structural tubes market has a large potential to grow and it will result in a shift toward robust demand for structural steel. 

"The Indian structural tubes market has the potential to grow from ~13MT in CY23 to 22MT by CY30, led by the government’s thrust on developing infrastructure, which will result in a shift towards robust demand for structural steel. JTL is planning to expand its capacity from the current 0.586MT to 1MT by FY25 and it will be enhancing its VAP share from the current 31% in FY23 to 50% by FY25. JTL will add an additional 0.2MT capacity each at Mangaon and Raipur facilities by the end of FY25 and 14kt at Mandi (by Q1FY24) which will take its total capacity to 1MT by FY25. Out of the incremental 0.4MT capacity in the next two years, ~50% of the capacity will be equipped with DFT (Direct Forming Technology) which will facilitate the company to produce various sizes of hollow sections without roll change, increasing efficiency and capacity utilization. This will also add additional SKUs to the company’s portfolio. In the long term, JTL plans to add another 1MT capacity post FY25 which will bring its total capacity to 2MT by FY28," the report said. 

Meanwhile, JTL Industries, which manufactures various grades of galvanised steel tubes and pipes, reported stellar numbers in terms of sales in the second quarter (Q2FY24), led by improvement in value-added products and exports.