Buy JBF Ind; target of Rs 250: Anand Rathi Securities

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Buy JBF Ind; target of Rs 250: Anand Rathi Securities

Anand Rathi Securities is bullish on JBF Industries and has recommended buy rating on the stock with a target of Rs 250 in its October 12, 2010 research report.

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Anand Rathi Securities is bullish on JBF Industries and has recommended buy rating on the stock with a target of Rs 250 in its October 12, 2010 research report.

"JBF Industries is leading Polyester chips & amongst top three players in Polyster Yarns also. Its subsidiary JBF RAK in Dubai, has 72,000 MTs capacity to produce PET[Polyster] films. Company is gradually moving up in value chain from Polyester Chips maker to Yarn & Film maker. This is boosting the margins further. Now Polyester Chips forms just 32% of the sales, while rest 68% comes from value added products like Yarn & Films. Now to integrate backward, to secure raw materials at cheaper cost, its subsidiary JBF RAK, Dubai is planning to set up a 1.2 mill MTs capacity of key input - PTA."

"This will be under JV with Oman oil [10% stake], who will provide Paraxylene [input for PTA]. Funding of this project will be managed by JBF RAK by internal generation, QIP issue and Term loans. JBF RAK may be listed on Singapore exchange also. Looking to improving fundamentals for Polyster Films and Yarns, we expect the performance of company should improve significantly in current year. We expect consolidated earnings of over Rs 70 for FY'11 and raise the target to Rs 250. BUY," says Anand Rathi Securities research report.

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