Prakash Ind can move to Rs 125-130: Tulsian

Prakash Industries can move to about Rs 125-130 in four-six months time, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Prakash Industries has an integrated setup. In fact, they have captive iron ore and coal mines and we all know the premium a company enjoys with these kinds of assets if they have such natural resources. In the past, they had problems of allegations being levied against them of taking away some material without accounting them in the books. But those things seem to be left behind." He further added, "If you now go by their product profile, they have sponge iron, mild steel, structural bars and captive power generations of about 115 megawatt (MW). The company has been posting a very good performance. They have yet to declare their Q3 results, which is due day after tomorrow. If you go by the H1 performance, they have already posted a topline of close to about Rs 890 crore and going by the EPS, they have about Rs 11.50 for H1." "In my view, the second half is likely to be better because of the better realisation of the products because of their own captive iron ore and coal mines. Even the company is expanding their power generation capacity to about 625 MW but that is a long programme, which will take about two-three years because of their captive coal." "Purely, going by the financials, they are looking at a topline of close to about Rs 1,800 crore for FY11 and an expected EPS of about 23-24 and is ruling at a PE multiple of about 4. In fact, lately we have seen all the metal stocks seeing their PE expansion happening to about maybe 7-8 times for these midsized companies. There is scope for PE expansion and earnings growth for the company in FY12 on the topline and bottomline. At Rs 96 a share, it looks quite reasonable, which can move to about Rs 125 to Rs 130 in maybe four-six months time."