Promoter shareholding is seen as a barometer of confidence in the business. If they increase the stake, it usually serves as a leading indicator of better times for the company. Insiders – who know the company best – usually buy more shares when they feel the business is headed in the right direction. This is because promoters know their business and expected growth better than anyone else.
So, when they increase shareholding, it signals a positive outlook. On similar terms, we have picked two stocks where promoters have increased their stake at a time when the market is in a downtrend. Let’s take a look.
1. Jindal Steel and Power
Jindal Steel is among India’s leading steel producers. The company’s operations include iron ore and coal mining, sponge iron and steel production, and power generation.
It has a total installed iron-making capacity of 10.4 MT per annum, liquid steel capacity of 9.6 MT per annum, and finished steel capacity of 6.6 MT per annum.
The company also has a captive power generation capacity of 2,684 MW (including 1,050 MW under construction). The company has seen a huge turnaround from a debt-heavy balance sheet to a deleveraged one.
Its net debt reduced to ₹136 billion in Q3 FY25 from a high of ₹391 billion in FY19. With lower debt, its net debt to earnings before interest, tax, depreciation, and amortization (EBITDA) declined to 1.4 from 4.6 in FY19. The company expects to maintain the ratio below 1.5x in the coming years.
With lower debt, its interest cost reduced from a high of ₹43 billion to ₹13 billion in FY24. As a result, the company’s profit has outpaced revenue growth, growing at a 16% compounded annual growth rate (CAGR) in the last three years to ₹59 billion. At the same time, revenue rose at a 13% CAGR to ₹504 billion.
In FY24, the company revenue declined 4% year-on-year to ₹581 billion, while net profit rose 86% to ₹58 billion primarily due to moderation in significant correction in input costs. However, in 9MFY25, its performance lagged, with flat revenue at ₹366 billion, and profit declining 37% to ₹31.5 billion due to higher costs and lower margins.
Looking ahead, the company aims to expand capacity. It has an ongoing capex to increase its steel-making capacity by 63% to 15.6 MT annually. Earnings are expected to improve in Q4FY25, driven by healthy volumes and lower costs.
In addition, management has proposed an additional capex of ₹160 billion over the next three years for various capacity expansions. Management believes this capex will lead to better realisation and margin accretion.
However, Jindal Steel operates in a cyclical industry with global overcapacity. Thus, it remains vulnerable to volatility in the sector. In addition, a 25% tariff on Indian steel and aluminum remains a concern for the industry. However, Jindal Steel made just 9% in export sales in FY24, meaning it remains insulated from the tariffs.
Nonetheless, the dumping of metals in the domestic market and the expected slowdown, or at worst, recession in the U.S. remain significant concerns for the metal industry. Thus, this should be closely tracked.
The company promoter increased its stake by 1.03% in Q4FY25 from 61.19% in Q3, totalling 62.22%. It trades at an EV/EBITDA multiple of 9.7, higher than the 10-year median of 8.2. Relatively, its valuation remains at a discount to JSW Steel (13.5) and par to Tata Steel (9.4).
2. Mangalam Cement
Incorporated in 1976, Mangalam Cement sells under the well-known brand names Birla Uttam Cement and Mangalam ProMaxX in North and Central India. Northern regions contribute close to 95% of total sales, where Rajasthan and Uttar Pradesh form the primary market, contributing 78%.
Mangalam Cement is eligible to avail of certain subsidies and rebates offered by the Governments of Rajasthan and Uttar Pradesh in consideration of its expansion projects in 2014 and September 2016 for 10 years ending in 2027.
The company produces two grades of cement: Pozzolona Portland Cement (PPC) and Ordinary Portland Cement (OPC). Blended cement accounted for 69% of the cement sales volume in FY24, whereas OPC accounted for the remaining 31%.
The higher proportion of blended cement aids the company’s profitability, as it enjoys a higher profit margin. The company has maintained a strong operational performance.
Its operating income declined 4% year over year to ₹1,725 crore in FY24 due to a drop in sales realization to ₹5,120 per tonne from ₹5,180 per tonne and a marginal 3% decline in sales volume, which fell from 3.46 MT in FY23 to 3.37 MT in FY24.
In 9MFY25, its total income fell 8.5% to ₹1,178 crore due to moderation in sales realization to ₹4,848 per tonne amid market consolidation and competitive pricing.
However, despite stagnant revenue, the company’s operating margin improved to 11.8% in FY24 and 12.3% in 9MFY 2025, up from 8.2% in FY 2023, due to cost optimization.
However, the profit before interest, lease, depreciation, and tax (PBILDT) per tonne improved from ₹427 in FY23 to ₹607 in FY24 and further to ₹620. Lower fuel costs and operation efficiencies drove the growth. The net profit declined 35% to ₹282 crores.
Looking ahead, it aims to maintain the current capacity utilisation of 77%, which is above the industry average as it operates in demand-driven sectors. However, overall revenue growth is expected to be moderate due to low demand.
The main risk is the cement industry’s cyclicality, which largely depends on the country’s economic growth. Thus, any slowdown will impact cement consumption and, thus, the company.
The company’s promoters have been continuously increasing their stake. In the last two years ending December 2025, their stakes have risen from 31.9% in Q3FY23 to 37.8% in Q3FY25. In the fourth quarter of FY25, the promoters bought another 1.47% stake in the company.
Mangalam Cement trades at EV/EBITDA multiple of 12.4, higher than the 10-year medium multiple of 9.2. Relatively, it trades on par with JK Lakshmi Cement (12.5) and Nuvoco Vista (11.5).
Conclusion
Promoter shareholding is often seen as a sign of confidence in a company’s future.
In the case of Jindal Steel and Mangalam Cement, recent increases in promoter stakes suggest that the management expects long-term value creation despite short-term challenges.
Both companies have taken steps to strengthen their financials and improve operating efficiency. However, given the cyclical nature of the steel and cement sectors, macroeconomic trends and demand-supply dynamics will continue to play a key role.
Investors may want to monitor developments closely, as sustained promoter interest could be an early sign of potential upside in the medium to long term.
Disclaimer
Note: We have relied on data from throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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