Buy Cochin Minerals; target of Rs 342: Firstcall Research

Firstcall Research is bullish on Cochin Minerals & Rutile and has recommended buy rating on the stock with a target of Rs 342 in its May 26, 2012 research report.

“Cochin Minerals & Rutiles Ltd is manufacturing the best quality Synthetic Rutile across the World. CMRL is India's largest manufacturer of Aqua Ferric Chloride which conforms to all major International Standards. CMRL Plant is ideally located at Edayar Industrial Development Area, hardly 15 Km. from Cochin Port and 100 Km. from the Ilmenite deposits. The Company started production with a modest capacity of 10000 TPA of Synthetic Rutile and 12500 TPA of Ferric Chloride. Subsequent through innovations and debottle-necking, the Company enhanced its production capacity of Synthetic Rutile to 45000 TPA, Ferric Chloride to 24000 TPA, Ferrous Chloride to 72000 TPA and Cemox to 18000 TPA. The quality management system of CMRL is ISO 9001:2008 certified by M/s. Bureau Veritas and accredited by UKAS (UK), ANAB (USA) and NABCB (India).”

“Cochin Minerals & Rutiles Ltd has reported net profit of Rs 273.76 million for the quarter ended on March 31, 2012 as against Rs 8.41 million in the same quarter last year, an increase of 3155.17%. It has reported net sales of Rs 751.52 million for the quarter ended on March 31, 2012 as against Rs 301.11 million in the same quarter last year, a rise of 149.58%. Total income grew by 149.58% to Rs 751.52 million from Rs.301.11 million in the same quarter last year. During the quarter, it reported earnings of Rs 34.96 a share.”

“At the current market price of Rs 290, the stock is trading at 3.36 x FY13E and 2.90 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.86.42 and Rs.99.99 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 36% and 153% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 2.12 x for FY13E and 1.84 x for FY14E. Price to Book Value of the stock is expected to be at 1.69 x and 1.07 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 342 for medium to long term investment,” says Firstcall Research report.

Institutional holding more than 40% in Indian cos   

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