February 15, 2017 / 16:04 IST
Growing at an expeditious pace in the current fiscal, the Indian steel production has seen one of the best growth rates in atleast last five years (10.5% in 9mFY17) on account of production cut by China and import reduction. This has proved propitious for the refractory market in India which is highly correlated with the steel production and demand.
Outlook
With the likelihood of steel industry to continue aid refractories demand, revenues of ORL are expected to culminate in 14% (annual) growth in the next two years galvanized by higher operating margins (over 19.5%). Balancing all odds, we assign ‘accumulate’ rating on the stock with a target of Rs 161 based on 24x FY18 EPS (peg ratio: 1.2) over a period of 6-9 months.
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