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JSL group (Jindal Stainless Ltd. plus Jindal Stainless Hisar Ltd.) has leadership position in the domestic stainless steel sector accounting for more than 50% share (even more in the high value add segment, excluding utensils).
Considering healthy demand prospects from key user industries, we expect good times ahead for the stainless steel sector.
We also introduce merged financials of Jindal Stainless and Jindal Stainless (Hisar).
With appointed date of April 2020 and expected closure of the merger by Q4 FY22 (according to the company), we value the combined entity at Rs 230/share on 2.3 times FY24E price/book given our assessment of more than 20% through cycle return on equity and 40% YoY profit growth in FY24E as expansion starts to kick in.
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