Chugh told CNBC-TV18, "IFGL Refractories is currently trading at a price of about Rs 48-49. This is a refractory company based in Orissa. Besides the plant in Orissa this company has got two major subsidiaries called Monocon International and Hofmann Ceramics. In total, this company has got manufacturing operations in seven countries. 2008-2009 was a difficult year for this company mainly because of the fact that the steel industry saw meltdown and the steel industry is company's biggest customers. Because of which the second half of the company was not that good. Company suffered losses in the second half of 2008-2009."
He further added, "The first half of the current financial year the company has achieved a profit of close to Rs 17 crore. We believe that the worst maybe over for the company. Company which had stalled its expansion project at Kandla has now restarted that project. That project will add about Rs 150 crore to the revenues and that will become operational in 2011. The company is also looking for more overseas acquisitions."
"Now because of the company's organic and inorganic expansion projects, which are going on company has the potential to become a significant player in the refractory market over the next couple of years. So, at the current marketcap of about Rs 150 crore and price to earning of about 4-5, we do not see too much of downside from these levels. At a P/E multiple of 4-5 the stock looks undervalued."
