Buy Sterlite Industries: Sanjeev Prasad

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Buy Sterlite Industries: Sanjeev Prasad

Buy Sterlite Industries, says Sanjeev Prasad, Executive Director & Co Head, Kotak Institutional Equities.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sanjeev Prasad See what other Experts & Brokerages are saying about Sterlite Ind See messages about Sterlite Ind Sterlite Ind BSE | NSE 10/02/12 Are Mutual Funds betting on Sterlite Ind?

Buy Sterlite Industries , says Sanjeev Prasad , Executive Director & Co Head, Kotak Institutional Equities.

Prasad told CNBC-TV18, "Jindal Steel & Power is a combination of several things. First of all you have a management, which is good, keeping in mind the fact that this company has not raised money - I don't recollect when they last raised the money and despite the fact they have been creating value, all the projects they have been well ahead of the market whether it be merchant power - they were the first to spot the opportunity."

He further added, "The steel operations are absolutely superb in terms of integration and cost structure. Given the coal mines this company is sitting on they can create large amount of value in merchant power generation. I think what the market playing here is not what is there in the company as of now. There is no way you can justify the valuation based on the existing power plant and existing steel assets. But what the market is looking at is maybe the ability to create value from huge amount of coal mines, this company is sitting on and as of now they are generating about 1,200 megawatts and they could easily go up to 8,000 mw over a period of time based on the amount of coal reserves they have. So that's what the market playing at and it's a company which will always deliver, so you don't mind paying a bit extra over here obviously how much extra we are paying that's somewhat difficult to factor in but I guess in this kind of a market people just want to pay for a good company which has always delivered, never looked at any dilution, corporate governance is good. You can buy the stock and keep it that's probably the call people are taking."