Buy IFGL Refractories; target of Rs 260: Karvy

Karvy Stock Broking is bullish on IFGL Refractories (IFGL) and has recommended buy rating on the stock with a target of Rs 260 in its research report.

November 18, 2014 / 12:26 IST

26 Aug, 2025 12:21

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Karvy Stock Broking's report on IFGL Refractories (IFGL)

IFGL Refractories (IFGL) is a manufacturer of specialised refractories and operating systems for the steel industry. IFGL Specialises in products for continuous casting of steel and offers integrated solutions in the flow control systems.

Doubling of capacity at Kandla - Gujarat and Ohio - USA, New capacities to commence production by FY15-16E taking the total capacity to 6.65 lakh pieces in shaped refractory segment. Kandla plant to serve the European markets freeing up capacity at Odisha plant to capitalize on growth in domestic steel industry.

We expect Sales, EBIDTA and PAT to grow at a CAGR of 14.4%, 10.6% and 16.5% to reach to Rs.10,179mn, Rs.1,485mn and Rs.889mn respectively by FY16E. EBDITA and PAT margins to reach to over 14.6% and 8.7% by FY16E due to lower distribution expenses and fiscal benefits.

Valuation and Outlook: At CMP of Rs.199, IFGL trades at 7.7x FY16E earnings per share, which appears to be attractive given the expectations over higher profitability and strong return ratios in the next two years. The capacity expansion program at Kandla and Ohio are for continuous casting products which could yield higher profits and large cash flows. We recommend a ‘BUY’ for a target price of Rs.260, implying 10.2x FY16E EPS which is 21.5% discount to FY16E Industry average P/E of 13x", says Karvy Stock Broking research report.