Scripscan:Bhushan Steel Ltd
cmp:300
Traded in:Nse-bse
Story:The company derives majority of its revenue from cold rolled and galvanised steel products. The bulk of its revenue comes from automobile and white goods sectors, which predominantly use flat products.The company has three plants strategically located in different parts of the country. The Dhenkanal plant in Orissa is close to the raw material supplier and produces sponge iron and billets, the primary steel products. The Khopoli plant in Maharashtra and Sahibabad plant in Uttar Pradesh are close to the two auto hubs, Pune and Gurgaon. These two plants primarily manufacture cold rolled and galvanised products used by auto.The Indian economy has raised the spending power of corporates and households. While the former are using their higher earnings to set up fresh capacities, the latter are utilising higher disposable incomes to acquire new cars or buy a house.Either way, this trend has boosted the consumption of steel in the country, particularly in sectors like infrastructure , white goods and automobiles. This means more business for Bhushan Steel, which manufactures flat steel products.From being a mere convertor, the company is planning to move up the value chain to a fully integrated primary steel producer by indulging itself into a major backward integration cum expansion project in Orissa in three Phases.Currently, the Indian automakers import nearly 30% of high-grade automotive steel, which creates a big opportunity for value-added players like Bhushan Steel. BSL drives nearly 35% of its sales from auto sector and is one of the preferred suppliers in the segment BSL is expected to drive premium over its peers with improved operating efficiency and strong domestic contribution coupled with its positioning in niche segment.With steel demand expected to keep growing at a fast clip, investors are advised to accumulate Bhushan Steel’s stock with a 2-3-year horizon.
Tuesday, December 27, 2011
Prakash Industries Ltd:-Company set to rock your portfolio
Scripscan:Prakash Industries Ltd
cmp:26
Code:506022
Story:For 2QFY2012, PIL`s net sales grew by 8.8% y-o-y to Rs 4.58 billion mainly on account of higher realization across product categories, partially offset by the decline in sales volumes. Gross realization of basic steel and wire rods increased by 26.1% y-o-y each. Basic steel sales volumes increased by 55.1% y-o-y to 27,923 tons, while wire rod sales volumes decreased by 28.9% y-o-y to 78,969 tons in 2QFY2012.Raw-material costs increased by 21.8% y-o-y to Rs 3.06 billion on the back of increased input costs mainly iron ore. Consequently, EBITDA margin slipped by 483bp y-o-y to 16.8% and EBITDA decreased by 15.5% y-o-y to Rs 770 million. Interest expenses grew by 573.0% y-o-y to Rs 20 million. Hence, net profit decreased by 22.7% y-o-y to Rs 550 million in 2QFY2012.PIL has delayed the commissioning of the first 125MW unit (5x25MW) to 4QFY2012 (earlier December 2011). On account of slow-moving regulatory hurdles, the company`s Fatehpur coal mine could take longer time than the company`s anticipation.While PIL has slowed down its power expansion plans, I expect PIL`s EBITDA to witness strong growth once the benefits of increased capacities of sponge iron and power commence production. PIL is currently trading at inexpensive valuations of 3.0x and 2.6x FY2012E and FY2013E EV/EBITDA, respectively. On P/B basis, it is trading at 0.3x each on FY2012E and FY2013E, respectively.Buy it with a 18 months target of 50rs.
cmp:26
Code:506022
Story:For 2QFY2012, PIL`s net sales grew by 8.8% y-o-y to Rs 4.58 billion mainly on account of higher realization across product categories, partially offset by the decline in sales volumes. Gross realization of basic steel and wire rods increased by 26.1% y-o-y each. Basic steel sales volumes increased by 55.1% y-o-y to 27,923 tons, while wire rod sales volumes decreased by 28.9% y-o-y to 78,969 tons in 2QFY2012.Raw-material costs increased by 21.8% y-o-y to Rs 3.06 billion on the back of increased input costs mainly iron ore. Consequently, EBITDA margin slipped by 483bp y-o-y to 16.8% and EBITDA decreased by 15.5% y-o-y to Rs 770 million. Interest expenses grew by 573.0% y-o-y to Rs 20 million. Hence, net profit decreased by 22.7% y-o-y to Rs 550 million in 2QFY2012.PIL has delayed the commissioning of the first 125MW unit (5x25MW) to 4QFY2012 (earlier December 2011). On account of slow-moving regulatory hurdles, the company`s Fatehpur coal mine could take longer time than the company`s anticipation.While PIL has slowed down its power expansion plans, I expect PIL`s EBITDA to witness strong growth once the benefits of increased capacities of sponge iron and power commence production. PIL is currently trading at inexpensive valuations of 3.0x and 2.6x FY2012E and FY2013E EV/EBITDA, respectively. On P/B basis, it is trading at 0.3x each on FY2012E and FY2013E, respectively.Buy it with a 18 months target of 50rs.
Mukand Ltd:Future growth prospects and outlook,buy/sell/hold,analysis and recomendation
Scripscan:Mukand Ltd
cmp:27
Code:500460
Story:Mukand is a Bajaj Group Company making special steel, alloy steel, stainless steel and they are mainly catering to the automobile, engineering and electrical equipment. Apart from that they have a small contribution for material handling equipment also.There has been consistent performance, it is only the value erosion because since we have seen the midcap and midcap stocks getting eroded in last couple of months. Sometimes you see these kinds of stocks if you pick up them up at this stage they can give return of 30-40% maybe over next 12 months. There has been some property sale buzz but I don’t think that is serious news now in respect to the company because they have two plants one at Kalwa and second at Hospet. Hospet we all know that all these companies have been facing problem because of non-availability of iron ore but now with auction and with production by NMDC the situation is getting resolved for all these companies.It is a Rs 3000 crore topline company with EPS of close to Rs 4 and considering the replacement cost or rich assets held by the company they may or may not get monetised because in Kalwa they have been holding a large chunk of land but I don’t think that is really a serous news for the stock to enter into because I don’t think that is likely to happen. But the operational performance of the company is likely to get improved largely at the Hospet plant and that should improve the profitability in the time to come. So taking that into consideration those who have been hunting for some midcap ideas can look to buy this stock with a view of about 18 months.
cmp:27
Code:500460
Story:Mukand is a Bajaj Group Company making special steel, alloy steel, stainless steel and they are mainly catering to the automobile, engineering and electrical equipment. Apart from that they have a small contribution for material handling equipment also.There has been consistent performance, it is only the value erosion because since we have seen the midcap and midcap stocks getting eroded in last couple of months. Sometimes you see these kinds of stocks if you pick up them up at this stage they can give return of 30-40% maybe over next 12 months. There has been some property sale buzz but I don’t think that is serious news now in respect to the company because they have two plants one at Kalwa and second at Hospet. Hospet we all know that all these companies have been facing problem because of non-availability of iron ore but now with auction and with production by NMDC the situation is getting resolved for all these companies.It is a Rs 3000 crore topline company with EPS of close to Rs 4 and considering the replacement cost or rich assets held by the company they may or may not get monetised because in Kalwa they have been holding a large chunk of land but I don’t think that is really a serous news for the stock to enter into because I don’t think that is likely to happen. But the operational performance of the company is likely to get improved largely at the Hospet plant and that should improve the profitability in the time to come. So taking that into consideration those who have been hunting for some midcap ideas can look to buy this stock with a view of about 18 months.
Gangotri Iron and Steel Company Ltd:Buy/sell/hold,growth prospects and recomendation,news and results,target price and analysis,views and outlook
Scripscan:Gangotri Iron and Steel Company Ltd
BSE code:530945
cmp:40
Story: The company is part of the Gangotri group that manufactures steel bars under the brand ‘GISCO Thermex TMT Bars’. It has widened it's marketing network and the products are being sold in some locations of Uttar Pradesh,in addition to the various areas of Bihar being served earlier.The product manufactured in the new unit has been well received in the market as far as quality is concerned.The Company is hopeful that the various steps taken by the Government of Bihar for economic and infrastructural development will increase the demand of Company's product and it will not face much problem in marketing it's product in future and particularly when the capacity production is achieved.The company is also developing two projects, one each in Patna and Kolkata. Incidentally, the one at Patna is said to be Bihar’s first ever shopping mall-cum-multiplex project, spread across six lakh square feet.Around four lakh square feet would be leased out for branded showrooms while the remaining would be sold outright. A five star hotel is also said to be a part of the plan.MARKETMEN are betting on Gangotri Iron & Steel on account real estate projects.It should consolidate at present levels and one can make an entry into the counter at dips.
BSE code:530945
cmp:40
Story: The company is part of the Gangotri group that manufactures steel bars under the brand ‘GISCO Thermex TMT Bars’. It has widened it's marketing network and the products are being sold in some locations of Uttar Pradesh,in addition to the various areas of Bihar being served earlier.The product manufactured in the new unit has been well received in the market as far as quality is concerned.The Company is hopeful that the various steps taken by the Government of Bihar for economic and infrastructural development will increase the demand of Company's product and it will not face much problem in marketing it's product in future and particularly when the capacity production is achieved.The company is also developing two projects, one each in Patna and Kolkata. Incidentally, the one at Patna is said to be Bihar’s first ever shopping mall-cum-multiplex project, spread across six lakh square feet.Around four lakh square feet would be leased out for branded showrooms while the remaining would be sold outright. A five star hotel is also said to be a part of the plan.MARKETMEN are betting on Gangotri Iron & Steel on account real estate projects.It should consolidate at present levels and one can make an entry into the counter at dips.
Lloyds Steel Industries Ltd:Buy/sell/hold,growth prospects and recomendation,news and results,target price and analysis,views and outlook
Scripscan:Lloyds Steel Industries Ltd
BSE code:500254
cmp:11
Story:Lloyds Steel Industries Limited engages in the manufacture and marketing of iron and steel products, capital equipments, and turnkey projects in India. The company’s products include ship sets of steering gears and stabilizers, steel pipes and tubes, silos, marine loading arms/truck and rail loading arms, hot and cold rolled coils/plates/sheets, GP coils/sheets and GC sheets, and power plants. It also engages in the fabrication of chemical, pharmaceutical, and other machinery and steel structurals, as well as provides engineering services.Lloyds Steel has been making losses over the last 4 years and theres more than a chance that it would continue with the same trend for the coming 4 years too.It attracts a marketcap of nearly 250crs and moves with big volumes.For a down and out counter why to pay such a huge lumpsum when there are so many solid counters having sunrising business models quoting at bargain prices? Retail investors with their huge fetish towards the penny priced stock fraternity would make sure that Lloyds Steel on good times quote at near par but to me this is more of a trading bet where one can look to have a position at 5-6rs only to exit at this 10-11 levels.If you are not a trader switch from this sick company to a better growth oriented candidate where capital appreciation as well as a good dividend yield backs you out.
BSE code:500254
cmp:11
Story:Lloyds Steel Industries Limited engages in the manufacture and marketing of iron and steel products, capital equipments, and turnkey projects in India. The company’s products include ship sets of steering gears and stabilizers, steel pipes and tubes, silos, marine loading arms/truck and rail loading arms, hot and cold rolled coils/plates/sheets, GP coils/sheets and GC sheets, and power plants. It also engages in the fabrication of chemical, pharmaceutical, and other machinery and steel structurals, as well as provides engineering services.Lloyds Steel has been making losses over the last 4 years and theres more than a chance that it would continue with the same trend for the coming 4 years too.It attracts a marketcap of nearly 250crs and moves with big volumes.For a down and out counter why to pay such a huge lumpsum when there are so many solid counters having sunrising business models quoting at bargain prices? Retail investors with their huge fetish towards the penny priced stock fraternity would make sure that Lloyds Steel on good times quote at near par but to me this is more of a trading bet where one can look to have a position at 5-6rs only to exit at this 10-11 levels.If you are not a trader switch from this sick company to a better growth oriented candidate where capital appreciation as well as a good dividend yield backs you out.
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