India Infoline has maintained buy rating on Adhunik Metaliks with target price of Rs 244 in its July 31, 2008 report. "Adhunik Metaliks acquisition of Orissa Manganese and Minerals Ltd (OMML) last year has proved to be a decisive step for the company. Iron ore and manganese ore prices have soared 100% in last one year and are expected to surge further. OMML's mining operations commenced on a small scale in Q3FY08 and are expected to ramp up in FY09. Mining operations being a high-margin business, we expect OMML's operating profit to be Rs3.3bn in FY09 and Rs 4.9 bn in FY10."
"We have valued AML based on the sum-of-parts method, which is primarily based on EV/EBITDA multiple for its steel and mining business and DCF for its power business. Based on the 4.5x FY10E EV/EBITDA for the steel and mining business of Rs 6.8 bn, we arrived at a fair value of Rs 209 per share. We recommend Buy with a SOTP target price of Rs 244 per share, implying an upside of 121.4%." According to India Infoline report.
