Buy Electrosteel Castings; target Rs 15: Angel Broking
Brokerage house Angel Broking is bullish on Electrosteel Castings (ECL) and has recommended 'Buy' rating on the stock with a target price of Rs 15 in its research report of August 2013.
September 04, 2013 / 13:13 IST
Angel Broking's report on Electrosteel Castings (ECL)
"Electrosteel Castings' (ECL) 1QFY2014 net sales rose by 8.8 percent yoy to Rs 466cr due to higher realizations in our view. ECL reported an EBITDA of Rs 38cr in 1QFY2014, compared to an EBITDA of Rs 11cr in 1QFY2013, due to lower raw material and power costs and lower other expenditure; the EBITDA margin also increased by 549bp. The company's depreciation costs decreased by 2.7 percent yoy to Rs 13cr and interest costs declined by 13.0 percent yoy to Rs 29cr. Therefore, the company posted a PAT of Rs 45cr compared to a PAT of Rs 17cr in 1QFY2013.""The iron ore mine continues to await stage 2 clearance. The company aims to produce 0.6-0.7mn tonne of coking coal in FY2014. The company has an order backlog of approximately 9 months."Outlook and valuation: "We maintain our positive stance on the company's initiatives of venturing into steel making through its associate ESL. Further, the company's backward integration initiatives through the allocation of iron ore (although not factored in our estimates currently) and coking coal mines are expected to result in cost savings from FY2014-15. We maintain our Buy view on the stock with a SOTP target price of Rs 15," says Angel Broking research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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