Jindal Saw gave negative returns of 5% in past 12 months

MUMBAI: The stock of Jindal Saw has been very volatile over the past 12 months. From a low of Rs 102 in August, 2011, it rose to Rs 180.9, a new 52-week high in March 2012. But it has lost momentum again and now trades at Rs 135. This gives the stock a price to earnings (P/E) multiple of 20 times. It has given negative returns of 5% over the past 12 months compared with a 31% decline in the stock of Welspun Corp, its competitor, which trades at a P/E of 11.4 times.

Jindal Saw, a diversified manufacturer and supplier of pipe products for the energy and water industry and for other industrial applications, earns more than half of its revenue from orders overseas.

Over the past twelve quarters operating profit margins have been contracting and profit growth has been on the decline on account of higher raw material expenses and slow execution of orders.

As of March 2012, the company's order book stood at $750 million, with 75% of the orders for large diameter pipes, 20% for ductile iron pipes and the rest for seamless pipes. These orders are expected to be completed by December 2012.

It currently has a debt of Rs 1893.48 crore, which is 0.5 times its shareholders equity. Cash on book currently stands at Rs 294.99 crore.