Stock market analysts have maintained ‘buy’ rating on Jindal Steel & Power Limited (JSPL) with a long term target of Rs 2,285.

According to them, interested investors can purchase the stock on declines with a strict stop loss of Rs 1,875.
 
Today (July 29), the company’s shares opened at Rs 1,950, as against its last closure at Rs 1,976.65 on Monday (July 28), on the Bombay Stock Exchange (BSE). Current EPS and P/E ratio stood at 79.98 and 24.16 respectively. The share price has seen a 52-week high of Rs 3,356 and a low of Rs 708 on BSE.

If investors have already invested in the company’s stock then it is wise to remain invested in the stock. The stock has great potential. It can still exhibit superb surge. It will achieve the target price as the company has aggressive growth plans and strong operating capabilities.

The outlook for the stock is really very strong, and it will really outperform the stock market. The stock will achieve the target price as the company has aggressive growth plans and strong operating capabilities.

The company registered a phenomenal increase in its standalone net profit for the three months period ended June 30, 2008. During the quarter, the profit of the company rose 60.85% to Rs 4,023.00 million from Rs 2,501.10 million in the same quarter, last year.

The company reported earnings of Rs 26.01 a share during the quarter. Net sales for the quarter surged 54.96% to Rs 18,953.10 million, while total income for the quarter jumped 54.35% to Rs 19,027.40 million.

The company has decided to invest Rs 32 billion in coal-to-liquid plan for extracting 80,000 bpd of oil by synthesizing coal.

The sub-committee of directors of the company, at its meeting held on Jun. 16, 2008, has allotted 691,343 equity shares of Re 1 each in line with the terms of employees stock option scheme (ESOS-2005).
 
Consequently with effect from Jun. 16, 2008 the company’s issued and subscribed share capital stands increased to Rs 154,652,683 dividend into 154,652,683 equity shares of Re 1 each.

During the last month, Jindal Power (JPL), a subsidiary of Jindal Steel & Power, started power generation at third unit of 250 MW.

Moreover, it signed up a Memorandum of Understanding (MOU)  with the state government of Jharkhand for establishing 2,640 MW (4X660 MW) power project in the state of Jharkhand at an estimated cost of Rs 118.80 billion.

On June 4, JSPL revealed its plans to build a Rs 50-billion thermal power plant in Orissa. The company plans to build a 1,080-mw, coal-fired captive power plant to fuel its 6-million ton (mt) proposed Orissa steel plant.

To cater to this increasing demand, JSPL is aggressively expanding its production capacities.