Recent Price Movement and Market Context
Jindal Worldwide’s stock has declined for three consecutive trading days, resulting in a cumulative return of -3.25% during this period. The latest price of Rs.33.02 represents the lowest level the stock has reached in the past year, significantly below its 52-week high of Rs.94.19. This decline contrasts with broader market trends, as the Sensex opened 88.12 points higher and is currently trading at 85,389.42, reflecting a 0.18% gain. The Sensex is also nearing its own 52-week high, just 0.48% shy of 85,801.70, and has recorded a three-week consecutive rise with a 2.61% gain. Mid-cap stocks are leading the market rally, with the BSE Mid Cap index up by 0.2% today.
Despite the positive momentum in the broader market, Jindal Worldwide’s share price remains below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning indicates sustained pressure on the stock relative to its recent trading history.
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Financial Performance and Profitability Indicators
Jindal Worldwide’s financial results have reflected some challenges in recent quarters. The company reported a quarterly profit after tax (PAT) of Rs.11.91 crore, which shows a decline of 31.3% compared to the previous corresponding period. Operating profit to net sales ratio for the quarter stood at 5.33%, marking the lowest level recorded in recent times. Dividend payout ratio (DPR) also registered at 0.00%, indicating no dividend distribution during the period.
Over the last five years, the company’s net sales have grown at an annual rate of 8.03%, while operating profit has expanded at a rate of 13.04%. These figures suggest moderate growth in top-line and operating profitability over the medium term. However, the company’s ability to service its debt remains constrained, with a Debt to EBITDA ratio of 2.53 times, signalling a relatively high leverage position.
Long-Term Performance and Market Comparison
Jindal Worldwide’s stock has underperformed the benchmark indices consistently over the past three years. The stock’s return over the last 12 months is -48.71%, in stark contrast to the Sensex’s 7.94% gain during the same period. This underperformance extends to the BSE500 index, where the stock has lagged in each of the last three annual periods.
Despite these challenges, the company’s return on capital employed (ROCE) stands at 12.8%, which is considered attractive relative to its sector peers. Additionally, the enterprise value to capital employed ratio is 3.2, indicating a valuation discount compared to historical averages within the Garments & Apparels sector.
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Promoter Activity and Shareholding Trends
One notable development is the increase in promoter shareholding. Promoters have raised their stake by 1.36% over the previous quarter, now holding 61.15% of the company’s equity. This rise in promoter confidence may reflect a commitment to the company’s strategic direction despite the recent price pressures.
Summary of Key Metrics
To summarise, Jindal Worldwide’s stock is trading at Rs.33.02, marking a 52-week low and continuing a short-term downtrend. The stock’s valuation metrics show a discount relative to peers, with ROCE at 12.8% and an enterprise value to capital employed ratio of 3.2. However, the company’s profitability metrics have shown contraction in recent quarters, with PAT down by over 30% and operating profit margins at their lowest levels. The company’s leverage remains elevated, with a Debt to EBITDA ratio of 2.53 times, which may be a factor in the stock’s subdued performance.
While the broader market and mid-cap indices have shown resilience and gains in recent weeks, Jindal Worldwide’s share price has not mirrored this trend, reflecting sector-specific or company-specific pressures within the Garments & Apparels industry.
Investors and market participants will likely continue to monitor the company’s financial results and market positioning as it navigates these challenges.
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