Usha Martin has target of Rs 125: Gorakshakar

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Usha Martin has target of Rs 125: Gorakshakar

Usha Martin has target of Rs 125, says Avinash Gorakshakar, Head Research, Anagram Capital.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Avinash Gorakshakar See what other Experts & Brokerages are saying about Usha Martin See messages about Usha Martin Usha Martin BSE | NSE 31/05/12 Are Mutual Funds betting on Usha Martin?

Usha Martin has target of Rs 125, says Avinash Gorakshakar , Head Research, Anagram Capital.

Gorakshakar told CNBC-TV18, "Usha Martin is one of the largest players in the wire-rod space and typically has a very integrated kind of business model. In fact right from the iron ore to the coal mines, I think its one of the few companies which has managed to actually integrate its business model in a very constructive manner. In fact recently the coal mine as well as the iron ore mine has actually started since the first quarter of this financial year and the company is actually invested about Rs 500 crore to Rs 600 crore in the last 18 months. Our sense is that most of the expansions benefits are going to be felt in the second half of this financial year."

He further added, "Last year the company recorded a consolidated bottom line of roughly of about Rs 171 crore on a equity of roughly of about Rs 30 crore. So typically we are very bullish on the company, our house view on the company is a buy. We have a target price of Rs 125."

"We expect that this year company should be recording a bottom line close to roughly about Rs 275-280 crore driven largely by volume and the price increase, which the company will be making. And more importantly since they have a integrated business model we believe that whatever steel price comes to them actually it will lead to a better contribution to the bottom line. So we have a buy on the stock with a target price of Rs 125 for the next 12 months."

Disclosure: We have recommended the above stock to clients.