Stock Review: Jindal Saw

Jindal Saw is an interesting play. In fact, saw pipe makers like Welspun Corp and Jindal Saw seem to have taken a lot of beating, but both have seen better-than-expected correction. Jindal Saw is one of the largest saw pipe makers, they make a wide variety of pipes- seamless pipes, saw pipes, arch welded pipes etc, which are used by the oil and gas industry. Their present book value is more than 150 on a historic basis.

The company's top line is close to about USD 1 billion for FY11 and the company has posted an EPS of Rs 16 for FY11 on a face value of Rs 2. So it gives a PE multiple of close to about 8 times and the price-to-book will be about 0.8 times. The company has three plants- one is in Mathura, second in Gujarat and third in Maharashtra. So, the company is in a position to cater to the western parts, and also to the other parts of the country with a good order book and good financials. 

Moreover, the promoters are quite experienced in this line for over 15 years. If one can keep a view of about 10-12 months, he can expect a return of about 30% from here on.