Buy Graphite India; target of Rs 114: SKP Securities

5882 Investors following Graphite India. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy Graphite India; target of Rs 114: SKP Securities

SKP Securities is bullish on Graphite India and has recommended buy rating on the stock with a target of Rs 114 in its July 12, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Hold HDFC; target of Rs 796: KRChoksey Buy Unitech; target of Rs 41: GEPL Capital Buy Shree Ganesh Jewel; target Rs 294: Firstcall Research ALSO READ See previous views by SKP Securities See what other Experts & Brokerages are saying about Graphite India See messages about Graphite India Graphite India BSE | NSE 31/05/12 Are Mutual Funds betting on Graphite India?

SKP Securities is bullish on Graphite India and has recommended buy rating on the stock with a target of Rs 114 in its July 12, 2011 research report.

"Graphite India Limited(GIL), part of K.K.Bangur Group, was incorporated in 1974 and is into manufacturing of graphite electrodes, impervious graphite equipments, and GRP/ERP pipes and tanks. It is the largest graphite manufacturer in India with a capacity to produce 60,000 MT in India and another 18000 MT in Germany. It has its plants in West Bengal, Maharashtra, Karnataka and Bihar. GIL also has power generating units in Karnataka and Maharashtra."

"It is the largest graphite electrodes manufacturer in India and ranks among the top six in the world with exports constituting about 60% of its turnover. With the demand for global steel expected to reach 1625 million tons by CY14 and in India to about 110 million tons by FY19-20 the demand for graphite electrodes is expected to remain buoyant. The steel industry is expected to grow on the back of heavy investment in infrastructure projects and auto. Undertaking capacity addition of 20,000 MT in Durgapur plant by virtue of which the total capacity of the company is expected to reach 98,000 MT by end of Q4FY12. The company has a low Debt/Equity ratio of 0.20 and a comfortable cash position providing it flexibility in going for organic and inorganic growth."
 
"GIL has faced margin pressures in FY11 due to an abrupt spurt in raw material prices mainly needle coke. To prevent wide fluctuations in its raw material cost it has tied up its needle coke requirements from suppliers for one year at comfortable prices. In the process of setting up a captive thermal power plant in Durgapur to source its own requirements. Tied up with KSK Energy for supply of power to its Nashik Plant from June 2011. We are positive on its long term growth and have valued it at 9x FY13E EPS of Rs 12.71 and have arrived at a target price of Rs 114 in the next 15 months time period implying a 27% rise from its present levels," says SKP Securities research report. 

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment