Jindal Steel & Power Ltd. which has a market capitalisation of $12.6 billion, said last week it will buy Oman's Shadeed Iron & Steel for $464 million to expand its reach and boost profitability.It's recent acquisition in the middle east is expected to boost earnings, but expensive valuations have analysts worried, deterring them from assigning positive ratings to the stock.
Shares in the firm have lost only about Ten percent of their value since the beginning of the year, compared with a 16-20 percent fall in other steelmakers - Tata Steel, SAIL and Ispat Industries. The BSE Metal Index dropped 15 percent in the period while the broader 30-share BSE Index has fallen about 6 percent.
Out of the 14 analysts covering JSPL, only 5 have recommended it to 'buy' while others have a 'hold' or 'sell' rated on it.
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