Moneycontrol
Mar 11, 2013 10:52 AM IST | Source: Moneycontrol.com

Buy Ankit Metal; target Rs 18: Firstcall Research

Firstcall Research is bullish on Ankit Metal & Power Limited and has recommended buy rating on the stock with a target price of Rs 18 in its March 08, 2013 research report.

 
 
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Firstcall Research is bullish on Ankit Metal & Power Limited and has recommended buy rating on the stock with a target price of Rs 18 in its March 08,  2013 research report.


"Ankit Metal & Power Limited is the part of the Rs. 38000 millions SKP Group, engaged in producing Rolled products comprising of Sponge Iron, Steel Melting Shop, Billets and Rolling Mill. The company's net sales registered an 19.90% increase and stood at a record Rs. 2995.43 million from Rs. 2498.35 million over the corresponding quarter last year. The company's net profit registered a 125.10% increase and stood at a record Rs. 127.72 million from Rs. 56.74 million over the corresponding quarter last year. AMPL is in the process of establishing a 600000 TPA pelletisation facility that will utilize iron ore fines & optimize raw material costs for DRI operations & ultimately TMT bars production. AMPL is enhancing the capacity of its wire rod mill from 100000 TPA to 180000 TPA & modifying the wire rod mill from MS to SS. Net Sales and PAT of the company are expected to grow at a CAGR of 27% and 40% over 2011 to 2014E respectively.


The company's net profit jumps to Rs.127.72 million against Rs.56.74 million in the corresponding quarter ending of previous year, an increase of 125.10%. Revenue for the quarter rose 19.90% to Rs.2995.43 million from Rs.2498.35 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.1.34 a share during the quarter, registering 125.10% decrease over previous year period. Profit before interest, depreciation and tax is Rs.395.89 millions as against Rs.180.75 millions in the corresponding period of the previous year.


Outlook and Conclusion: At the current market price of Rs.16.50, the stock P/E ratio is at 2.77 x FY13E and 2.37 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.5.96 and Rs.6.95 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 27% and 40% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 0.88 x for FY13E and 0.73 x for FY14E. Price to Book Value of the stock is expected to be at 0.31 x and 0.28 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY' in this particular scrip with a target price of Rs 18 for Medium to Long term investment," says Firstcall Research report.


Institutional holding more than 40% in Indian cos


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To read the full report click on the attachment

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