On April 19, the metal company’s shares gained 4% on the NSE in an otherwise subdued market on the expectation of enhanced demand from China.

At 10:11 am, the Nifty Metal index, the top gainer among sectoral indices, rose 1.1% compared to a 0.17% decline in the Nifty 50. Jindal Steel & Power (JSPL), Tata Steel, Steel Authority of India, JSW Steel, National Aluminum Company and Vedanta plunged from 1% to 4%.

Most base metal prices increased amid backing from tightening inventories and a softer US dollar. Sentiment endured support in base metals amid robust Chinese credit growth data, a weaker US dollar, and bargain buying after price correction.

Senior Analyst of HDFC Securities, Saumil Gandhi, expects base metals to rise on the expectation of improving Chinese demand. JSPL has surged 4% among individual stocks to Rs 589.50 on the NSE. Thus, in April, the stock rallied 8% against a 1.6% rise in the Nifty 50 and a 5.7% gain in the Nifty Metal index.

Besides, solid domestic demand aids the volume growth, while JSPL experiences healthy spreads amid various cost-saving measures commenced. JSPL should maintain a comfy financial risk profile, apart from the expansion project in the subsidiary, in line with the management’s stance. CARE Ratings said it always keeps the net debt to PBILDT below 1.5x and preserves the liquidity of around Rs 3,000 crore.

JSPL has finished the divestment process of Jindal Power Limited (JPL) against a cash consideration of Rs 3,015 crore in Q1FY23, ceasing to be an associate entity of JSPL. The ratings also take cognisance of the entire debt’s repayment in the subsidiary companies.