Jindal Stainless (Hisar) spikes 4% on new agreement with DRDO

Shares of Jindal Stainless (Hisar) rose over 4 percent intraday on Wednesday as investors cheered the company’s new agreement with the country’s defence body. The stainless steel maker entered into a licence agreement with the Defence Research and Development Organisation (DRDO), which entails transfer of technology to manufacture high nitrogen steel (HNS) for Armour applications, according to a notification filed to the exchanges by the firm. The company claims that the use of HNS will replace Armour steel, an existing material which is mostly imported. This, it says, will result into 50 percent cost efficiency in material acquisition. "This development reaffirms our endeavour to achieve higher benchmarks. We look forward to collaborate with Ministry of Defence to achieve greater efficacy of Indian armed forces and then take forward our capabilities," said Abyuday Jindal, vice-chairman, Jindal Stainless (Hisar).The company’s management is optimistic on the deal and sees defence opportunity at 30,000-40,000 tonnes in 3-4 years. In an interview to CNBC-TV18, Abhyuday Jindal, vice chairman, Jindal Stainless (Hisar) said that steel volumes will increase by 10-15 percent this year. Its capacity utilization currently stands at 100 percent. Additionally, Jindal expected margins for the current year to be at 12-15 percent. At 12:12 hrs, the stock was quoting at Rs 116.00, up Rs 1.40, or 1.22 percent, on the BSE. It touched a 52-week high of Rs 119.50.