Metal sector remains strong despite market weakness; JSW Infrastructure jumps over 4% on signing SPA to acquire a majority stake in PNP Port

Stocks
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Indian headline indices fluctuated between modest gains and losses throughout the session. The capital goods and fast-moving consumer goods (FMCG) sectors performed the worst, whereas the BSE Power, BSE Utilities, and BSE Metals sectors impressed investors with gains of over 3% each in an otherwise sluggish market. 

During the quarter earnings season, the metals industry underwent a roller coaster ride, with mixed financial results and conflicting investor sentiments. BSE Metals, which gained around 7.5% over the last month, was one of the best-performing sectors, despite major players in the metals and mining industries, such as Tata Steel, Vedanta, and Hindustan Zinc, posting disappointing quarterly results. 

In comparison to the same quarter last year, Vedanta Ltd recorded a 40% decline in consolidated net profit for the April-June quarter of FY24, coming in at Rs 2,640 crore compared to Rs 4,421 crore. The consolidated net profit of Tata Steel plunged 93% year-on-year to Rs 525 crore, impacted by its operations in Europe. 

Shares of Jindal Steel & Power and Hindalco Industries, on the other hand, topped the advances in the BSE Metal pack today, with gains of 5.61% and 4.02%, respectively. Shares of JSW Steel Ltd, the top BSE Sensex gainer today, soared more than 3% as the company announced a net profit of Rs 2,428 crore for the quarter that ended in June, 189% higher than the same quarter the previous year. JSW Steel replaced HDFC on the BSE Sensex following the merger of HDFC and HDFC Bank. 

The Union Budget 2023-24 has placed a strong emphasis on infrastructure and development, which will benefit the metals and mining sector in the long run. Under the Atmanirbhar Bharat 3.0 package, a production-linked incentive scheme has been introduced in the speciality steel sector. The ‘Make in India’ initiative of the Indian government seeks to boost the manufacturing sector’s share of GDP. 

Keep a close eye on the metals and mining industries in light of their future potential!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.
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JSW Infrastructure jumps over 4% on signing SPA to acquire a majority stake in PNP Port

The acquisition values PNP Port at an enterprise value of around Rs 700 crore with a current capacity of 5 MTPA and the potential to expand to 19 MTPA.

At 2 pm, JSW Infrastructure shares were trading at Rs 227.85, up by 4.73% from its previous closing of Rs 217.55 on the BSE.

Acquiring a majority stake in PNP Port

JSW Infrastructure has signed a Share Purchase Agreement (SPA), through its subsidiary, JSW Dharamatar Port, with SP Port Maintenance (a Shapoorji Pallonji Group Company) to acquire majority shareholding of PNP Maritime Services (PNP Port), an operating port company located at Shahbaj, Raigad district, Maharashtra, which is about 20 nautical miles from Mumbai Anchorage. The acquisition values PNP Port at an enterprise value of around Rs 700 crore with a current capacity of 5 million tonnes per annum (MTPA) and the potential to expand to 19 MTPA.

This acquisition is part of JSW Infrastructure’s strategic direction to explore opportunities to expand organically and inorganically, to provide end-to-end logistics services near the cargo consumption/generation centres. PNP port is expected to strengthen JSW Infrastructure’s position to provide Hub & Spoke model services to customers, thereby saving substantially in logistics costs. JSW Infrastructure intends to upgrade the PNP Port facilities and expand its capacity from the current 5 MTPA to 19 MTPA in a phased manner. This acquisition furthers its vision to increase the use of waterways and existing railway facilities at PNP and adds synergies to the last-mile connectivity.

Company profile

JSW Infrastructure is part of the JSW Group, a multinational conglomerate with an international portfolio of diversified assets across various sectors, including steel, energy, infrastructure, cement, paints, venture capital, and sports.

Stock price movement

On Tuesday, the stock opened at Rs 222.50 and touched a high and low of Rs 234.60 and Rs 222.10, respectively. The BSE group ‘B’ stock of face value Rs 2 has a 52-week high and low of Rs 234.60 and Rs 141.75, respectively. Last one week high and low of the scrip stood at Rs 234.60 and Rs 207.70, respectively. The current market cap of the company is Rs 47,775.04 crore.

The promoters holding in the company stood at 85.61%, while Institutions and Non-Institutions held 7.77% and 6.61% respectively.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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Breakout or reversal? JSW Steel is on the verge of a bullish trend

The formation of a broadening triangle in this stock at Rs 824 suggests the start of a new bullish trend to reach at its all-time high.

JSW Steel Ltd may become a strong positive breakout candidate in the coming time. The stock price is currently trading at Rs 824 and has witnessed the formation of a descending broadening triangle chart pattern. The RSI, ADX and other parameters of technical analysis are in sync with the breakout.

Descending Broadening Triangle

A descending broadening triangle is a rare chart pattern that occurs when two diverging trendlines, one rising and one horizontal, converge at a point. It is considered a bullish reversal pattern, signalling a potential end to a downtrend and the beginning of an uptrend.

The breakout from the descending broadening triangle is typically strong and can lead to a significant move higher in the stock. However, it is important to note that not all descending broadening wedges lead to breakouts, and some patterns may fail.

The descending broadening triangle is a bullish reversal pattern that can be a useful tool for technical traders. The pattern is relatively rare, but it can be very reliable when it does occur. Traders should look for descending broadening wedge patterns in liquid markets after a period of consolidation or a downtrend.

JSW Steel Ltd

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1-day chart of JSW Steel Ltd

JSW Steel’s stock closed with an indecision candle as the day progressed to complete a chart pattern called a broadening triangle.

The stock witnessed a small gap-up opening at Rs 824, jumped to its day high of Rs 833, and touched an intraday low of Rs 815. The stock has been in a strong uptrend for the last 20 days.

JSW Steel has formed a descending broadening triangle chart pattern waiting for a breakout or reversal, which is a turning point for the stock price to be bullish or bearish. The stock price may touch its upper resistance and consolidate within the range of Rs 800 and Rs 835 to accumulate some volume, then breakout strong as shown on the chart. Once the upper resistance breaks out, the stock will trade at its all-time high with high momentum, as the BSE Metal index has already given the same chart pattern breakout.

The relative strength index also entered the 65–80 range without any whipsaws, suggesting bullish momentum for stocks. The ADX indicator line is also above the 25 level, showing the good strength of the price.

During any corrective moves, the major support level to watch for is Rs 800. The overall structure remains favourable for traders, as the stock continues to trade above all its important moving averages, indicating a sustained upward trend.

The stock has given substantial returns of 2,015.58% over a decade.

JSW Steel Ltd is a holding company, which engages in the production, distribution, and trade of iron and steel products.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.