Current market price: Rs 192.80
Target price: Rs 418
Growth potential: 116.80%
Brokerage: Emkay
Godawari Power and Ispat (GPIL) manufactures sponge iron, billets, ferro alloys, power, wires rods and steel wires. The company is a flagship company of the Hira Group of Industries.
GPIL announced to acquire 75% stake in Ardent Steel, which is a newly formed company and is under the process of setting up 0.6 mtpa pelletization plant in Orissa. The company expects the plant to be operational by the third quarter of fiscal year 2010.
GPIL`s backward integration plan is progressing as per schedule. The 0.6 mtpa pelletization plant is expected to be operational by second quarter of fiscal year 2010.
The total estimated capital expenditure is of Rs 2,350 million, which will be funded through a debt of Rs 995 million and equity of Rs 1,355 million. All the funding requirements are fully tied up and no further dilution is expected.
Considering the strong demand of long products, strong pricing environment, company`s thrust for backward integration and the growth rate of GPIL, Emkay Share and Stock Brokers have initiated a `BUY` signal on the stock with a price target of Rs 418.
McNally Bharat Engineering Rating: Buy
Current market price: Rs 142.50
Target price: Rs 255
Growth potential: 78.95%
Brokerage: Emkay
McNally Bharat Engineering (MBEL) is engaged in providing turnkey engineering solutions. The company provides turnkey solutions in the power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic, industrial water supply and other areas.
MBEL is planning to treble its existing capacity through brownfield expansion of existing plant at Kumadhubi and construction of
MBEL has commenced commercial production under the first phase of expansion of its Kumardhubi plant. The first phase of Asansol plant, which shall cater to the steel and power verticals, is expected to be commissioned in fisacal year 2009.
MBEL acquired 68.28% stake in Sayaji Iron and Engineering Company, in May 2008 as part of its plans to boost its equipment business for a consideration of Rs 590 million.
Keeping in view the robust opportunities in the industry, capacity expansion of the company and the growth rate of MBEL, Emkay Share and Stock Brokers have initiated a `BUY` signal on the stock with a price target of Rs 255.
Gujarat Mineral Development Corporation Buy
Current market price: Rs 270.15
Target price: Rs 420
Growth potential: 55.46%
Brokerage: Geojit Financial Services
Gujarat Mineral Development Corporation (GMDC) is one of the leading mining and mineral processing companies. The company is into exploration of lignite, fluorspar and other minerals like calcined bauxite, alumina, manganese, etc. GMDC, which uses best-known mining technology, is largest merchant seller of lignite in the country.
GMDC has new mines under development at Rajpardi,
These mines will feed two power projects of 2,750 mw and 1,750 mw with GMDC investing in 26% of their equity. However, coal supply will be at arms length and market determined rates and expect coal volumes at 15-18 million metric tons in the next 4-5 years.
GMDC is setting up 6 mtpa cement plant in joint venture with Jaiprakash Associates in
With captive power and cement plant, GMDC is leveraging its coal control capacity to turn it into components of infrastructure development, such as power, cement, etc. Thus, GMDC is set to achieve turnover of Rs 100 billion by fiscal year 2012.
Keeping in view higher volumes and realizations, capacity expansion of the company and the growth rate of GMDC, Geojit Financial Services have initiated a `BUY` signal on the stock with a price target of Rs 420.
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