Stock report on Prakash Industries from Motilal Oswal stock brokers stock market investment research team. They have recommended to buy stocks of Prakash industries for ~30% returns on the back of hike in production and capacity expansion.
The company will spend Rs 33 billion over five years to nearly double its crude steel production, expand its sponge iron capacity to capitalize on iron ore integration and put up a 625MW power plant.
The company's steel making capacity will increase from 550,000tpa to 1mtpa by March 2012 and its sponge iron capacity will increase from 400,000tpa to 1mtpa. Prakash Industries is extracting nearly 1mtpa of coal from the Chotia mine to feed its 100MW CPP and sponge iron kilns.
Market Cap 2,456.13
* EPS (TTM) 18.65
* P/E 11.40
* P/C 9.53
* Book Value 73.65
* Price/Book 2.89
Div(%) 0.00
Div Yield(%) -
Market Lot 1.00
Face Value 10.00
Industry P/E 22.41
Over FY09-12, expected EBITDA is to grow at 39% CAGR to Rs 7.9 bn due to raw material integration. Expected PAT growth is of 40% CAGR to Rs 5.6 billion. Target price comes to be Rs.285 (30% upside) based on 5.5x FY12E EV/EBITDA. "Buy stocks", says Motilal Oswal stock research report.
Download detailed report here.
