Buy Prakash Industries; target of Rs 68: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research report on Prakash Industries“PRAKASH INDUSTRIES LTD was established in 1980. It manufactures and sells steel products primarily in India. The company operates in three segments: Power, Steel, and PVC Pipe & Others. It produces sponge iron, steel billets/blooms and Ferro alloys; wire rods and HB wire products for various applications, including binding wire, GL wire, barbed wire for fencing, armored sealed wire for heavy electrical cables, nut bolts, nails, screws, alpine, wire ropes, wire mesh, etc.; and TMT bars for construction and infrastructure projects. The company also manufactures and supplies rigid PVC pipes for irrigation, sewerage, and other applications. Company has set up a state of the art technology integrated steel plant at Champa in the state of Chhattisgarh. Company has set up facilities to manufacture Wire Rod, HB Wire, TMT bars and Structural’s which puts forth the concept of forward integration in the company to give highest value addition. Company has always emphasized on backward integration to ensure uninterrupted supply of quality raw materials.”“Captive coal mines of the Company at Chotia in the state of Chhattisgarh are already in operation with modern methods of mining, resulting in operational excellence. Company has been allotted three coal blocks at Chotia, Madanpur & Fatehpur in the State of Chhattisgarh. Operations of Chotia Coal mines were started in record time of 33 months. In the Chotia coal mines, several modern methods of mining have been initiated resulting in operational excellence. Company also owns Iron Ore mines to fulfill the Iron Ore requirement for Sponge Iron manufacturing which are yet to be operated as various statutory clearances are under processing. Today, the company operates a captive power generation plant, making the company self reliant in power for the integrated steel plant & future expansion projects. Along with expansion plans in the steel sector, company has also decided to focus on expansion in power generation with installation of boilers based on utilization of low grade fuel & latest technology turbines.” “At the current market price of Rs. 57.50, the stock P/E ratio is at 3.65 x FY15E and 3.15 x FY16E respectively. Earnings per share (EPS) of the company for the earnings for FY15E and FY16E are seen at Rs. 15.75 and Rs. 18.23 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 10% and 14% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 2.58 x for FY15E and 2.12 x for FY16E. Price to Book Value of the stock is expected to be at 0.33 x and 0.30 x respectively for FY15E and FY16E. We recommend ‘BUY’ in this particular scrip with a target price of Rs. 68.00 for Medium to Long term investment,” says Firstcall Research report. 

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