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Shares of JSW Steel surged as much as 3.3 per cent to Rs 266.85 as the company had on Tuesday reported a 29 per cent increase in net profit at ₹836 crore in the September quarter against ₹647 crore logged in the same period, despite pressure on realisation and high cost.
Sales were up 17 per cent at ₹16,638 crore (₹14,180 crore).
Seshagiri Rao, Joint Managing Director, said operational challenges apart, import of steel from China doubled to 8.22 lakh tonnes in the September quarter as it dumped sub-standard material below the market price.
HSBC has raised the target price to Rs 280 from Rs 240. It expects the company to benefit from demand recovery and declining costs.
Emkay Global Financial Services analysts believe that the company's H2 performance would be better, aided by reduction in cost, improvement in realisation and better offtake.
20 of 30 brokerages have rated the stock as “buy”.
Earlier in August, Sajjan Jindal-owned JSW Group had re-initiated talks to buy Lucchini SpA, the second largest steel producer in that country.
In 2014, JSW Steel had made a bid to acquire Lucchini. However, Algeria’s Cevital Group acquired it the following year and renamed the company Aferpi (Acciaierie e Ferriere di Piombino) SpA.
(With inputs from Reuters)
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