Buy Prakash Industries; target of Rs 52: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking is bullish on Prakash Industries and has recommended buy rating on the stock with a target of Rs 52 in its February 11, 2013 research report.
 
“Prakash Industries (PIL) reported a 16.2% yoy top-line growth; however, its operating margins continued to slide mainly due to higher iron ore costs. Given the inexpensive valuations, we recommend a Buy rating on the stock.”
 
“For 3QFY2013, PIL’s net sales grew by 16.2% yoy to Rs605cr mainly on account of higher volumes which although were partially offset by lower realizations, sales volumes of structural steel/TMT and wire rods increased by 1677.3% and 29.1% yoy to 49,250 tonne and 88,983/tonne, respectively. Raw material costs increased by 25.1% yoy to Rs435cr due to increase in prices of inputs. The EBITDA margin slipped by 677bp yoy to 10.7% and EBITDA decreased by 28.8% yoy to Rs65cr. Net profit also decreased by 67.7% yoy to Rs21cr in 3QFY2013.”
 
“PIL has slowed down its power expansion plans; nevertheless, we expect PIL’s EBITDA to witness a strong growth beginning FY2014 once the benefits of increased capacities of sponge iron and power commence meaningful production. Moreover, PIL is currently trading at inexpensive valuations of 4.2x and 3.2x FY2013E and FY2014E EV/EBITDA, respectively. On P/BV basis, it is trading at 0.3x and 0.2x FY2013E and FY2014E, respectively. Hence, we recommend a Buy rating on the stock with a target price of Rs52, valuing the stock at 3.6x FY2014E EV/EBITDA,” says Angel Broking research report.

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