Jindal Stainless Hisar Ltd proposes capacity expansion

The Board of Directors of Jindal Stainless (Hisar) Limited (the "Company") have approved a brownfield expansion plan for JSHL to leverage its leadership position in specialty products, thereby enhancing its product mix and augmenting market reach. The expansion of Specialty Products Division (SPD), with an estimated CapEx of INR 450 crore, is planned to be rolled out in two phases:

3x expansion of Precision Strip capacity: This is planned to go from the current capacity of 22,000 tonnes per annum (TPA) to 60,000 TPA in two phases. It would strengthen the Company's presence in segments such as Auto, Process Industry, and Oil & Petrochemicals, and also cater to niche segments like Aerospace and Electric Vehicles. The estimated CapEx for this project is ~INR 250 crore and includes the earlier announced CapEx of INR 190 crore. After the first phase of expansion by Q2 FY22, the total capacity would stand at 48,000 TPA.

1.7x expansion of Blade Steel capacity: This will go from the current capacity of 14,000 TPA to 24,000 TPA in two phases. After the first phase of expansion by Q2 FY23, the total capacity would stand at 20,000 TPA. JSHL is among world's leading razor blade steel producers with a majority market share, globally. The expansion will help further consolidate its position. Estimated CapEx for this project is ~INR 200 crore.

The existing capacity utilization of Precision Strips is ~ 100% and Blade Steel is ~ 94% for Q1 ended June 30, 2021.

The total investment required is approx. Rs.450 Crore. The funds will be raised through combination of internal accruals and debt.

Commenting on the performance of the Company, Managing Director, JSHL, Mr Abhyuday Jindal, said, "The expansion of SPD will further consolidate JSHL's dominance in the specialty stainless steel segment. The expansion will enable us to foray into new and upcoming high-end segments like EVs and Aerospace. This transformation, along with an intensified approach towards digital manufacturing, would accelerate JSHL's growth."

Shares of Jindal Stainless (Hisar) Ltd was last trading in BSE at Rs. 285 as compared to the previous close of Rs. 277.45. The total number of shares traded during the day was 374371 in over 5957 trades.

The stock hit an intraday high of Rs. 294.8 and intraday low of 272.5. The net turnover during the day was Rs. 107549894.

Source : Equity Bulls

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