A turnaround has made Jindal Stainless Ltd. analysts’ best bet among steelmakers.
The stock is estimated to offer the highest return on shareholders’ equity in the next financial year, according to data compiled by BloombergQuint. It’s also the cheapest among carbon steelmakers, trading below its two-year average price-to-earnings multiple and at a discount to peers.
Jindal Stainless outperformed larger peers like Tata Steel Ltd., JSW Steel Ltd., Jindal Steel and Power Ltd. and Steel Authority of India Ltd. in 2017. But the stock has fallen about 19 percent so far this year, becoming the worst performer after SAIL.
Yet, a robust outlook on domestic stainless steel, highest-ever operating income and reducing debt makes the company a “textbook turnaround story”, according to Edelweiss, which initiated coverage on the stock with a ‘Buy’ rating and an upside potential of 45 percent.