Jindal empire heir eyes $8 bn market cap for paints, cement

Jindal empire heir eyes $8 bn market cap for paints, cement

November 28, 2019

Parth Jindal, son of industrialist Sajjan Jindal, who took charge of emerging businesses at the $14-billion JSW Group three years ago, is busy scaling up the consumer-driven arms of cement and paints to take their combined market capitalisation to $8 billion on a par with the flagship JSW Steel, led by his father.

Pointing out that matching JSW Steel by revenue was a tall order, Parth Jindal, MD, JSW Cement, told The Hindu, “In market capitalisation, we will come close as cement and paints are consumer-driven businesses and enjoy better price-to-earning multiples.”

“Steel trades at 7-8 times price to earning multiples, cement at 35 times and paints at 60 times price to earning multiples. I just need to make one-sixth of the profit that dad makes. JSW Cement and JSW Paints will have a market capitalisation in excess of $4 billion each,” he said.

Mr. Parth Jindal has plans to scale up JSW Cement capacity to 25 MTPA from 14 MTPA now and then call for an IPO to take the capacity to 35 MTPA to figure among the top five cement players.

Asked how JSW Cement and JSW Paints will take on market leaders like UltraTech and Asian Paints, Mr. Jindal said, “About 20 years ago, the same questions were asked to my dad that how will you take on Tata Steel. He showed it to the world. We are market share leaders in steel. Now, the same question comes to me. How would you take on UltraTech and Asian Paints. I say, give me 20 years and I will do that.In our every review meet, we discuss what to do to take on UltraTech. How can we do better than Asian Paints”

In May, JSW Group has forayed into the ₹42,000-crore organised paints business with the launch of JSW Paints and aims to be among the top three players in the next five years.

Steel business

JSW Steel will become a 28 MTPA player, pushing it into the top 10 companies list globally, excluding China. “Dad has plans to take JSW Steel’s capacity to 50 MTPA by 2025. Now, our benchmark is not Tata Steel any more, we are looking at Posco, JFE and Nippon Steel as benchmarks,” said Mr. Jindal. On competition from ArcelorMittal, which is entering India, Mr. Parth Jindal said, “There is no competition. They are welcome. We are very happy that a credible player like ArcelorMittal has come to India.They will definitely bring in R&D and technology, we will also learn from them. There is no threat per se because demand-supply situation in the country in very healthy. There is no problem. We are market share leaders in steel in India, whether it’s Tata Steel or ArcelorMittal, it doesn’t matter. I spoke to Aditya (Mittal) a few days ago to congratulate him and he said in India I have to learn from you. We will try and catch [up with] you. Think of a company like ArcelorMittal saying that.”

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