Jindal Steel & Power Limited stock tanked more than 5 percent after reports of the Enforcement Directorate conducting search operations in its Gurugram and Delhi offices.
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The Jindal Steel & Power Limited (JSPL) stock has tanked 5 percent after CNBC-TV18 reported, learning from people in the know, that the Enforcement Directorate (ED) is conducting search operations at two of the company's locations in Delhi and Gurugram. ED sources have indicated that they are investigating FEMA (foreign exchange management act) violations by the company.
A response on this is awaited from the company.
The JSPL stock fell down to Rs 527 per share
Deven Choksey of KRChoksey reckons that the steel sector could come under stress because of higher amount of energy costs and the compression in margin.
JSPL posted a 2 percent rise in steel production at 2.11 million tonnes in the quarter ended March 2022. Its sales also registered a growth of 8 percent at 2.07 Million Tonnes (MT) in the January-March period, according to a statement.
In the financial year 2021-22, the company produced a record 8.1 MT of steel while sales were at a record 7.63 MT. Despite several challenges throughout FY22, JSPL managed to meet its production guidance breaching the 8 MT mark for the first time. For the fifth consecutive year, JSPL has also posted spectacular growth in annual steel sales on a year-on-year basis, the statement said.
Kotak Institutional Equities recently reiterated a 'buy' rating on JSPL and raised its target price for the stock to Rs 700 per share from Rs 565 per share.
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(Edited by : Abhishek Jha)
First Published: IST