Prakash Industries

Prakash Industries is engaged in making PVC Pipe and has an integrated steel making capacity for sponge iron, billets, ingots, and structurals as well as wire rods and HB wires. · The present equity of the company is Rs.106.50 crores, of which, promoters are holding 59.71%, MF, Banks and FIIs are holding 7.17% while 33.12% is held by the public. · The company has total 8 plants in Chattisgarh, Uttaranchal, MP, Punjab, Orissa and Tamil Nadu. · For H1 FY 08 the net income of the company was at Rs.566.32 crores, PBT of Rs.104.97 crores, PAT of Rs.104.85 crores which has resulted in an EPS of Rs.9.59 for first half. · H1 of FY 08 had power division posting sales of Rs.86.78 crores with EBIT of Rs.57.51 crores, PVC Pipe Division with sales of Rs.60.80 crores and EBIT of Rs.8.65 crore, and Steel Division with sales of Rs.578.78 crores and EBIT of Rs.45.22 crores. · FY 08 may have topline of Rs.1,500 crores, PBT of Rs.275 crores and PAT of Rs.250 crores, resulting in an EPS of Rs.24. The improved profits are possible due to captive coal and iron ore mines as well as products exploiting full value chain. · The company has recently been allotted Coal blocks in Chattisgarh for 625 MW power generating capacity with reserves of 45 million MT. · The company has signed an MoU with MP Govt., on 27-10-07, to set up 1,000 MW power plant, with an outlay of Rs.4,500 crores. · The company has two captive coal mines for sponge iron and power plants, of which, Chotia Coalfield has started mining operations, extracting high grade coal, used for sponge iron manufacturing as well as power generation at Champa plant. · The company has iron ore mines at Chattisgarh and Orissa for its existing needs and have applied for iron ore lease areas in Chattisgarh, Orissa and Jharkhand, which is in advanced stage of processing with a target to have 1 MTPA capacity of iron ore. · The present capacity of sponge, iron of 4 lakh TPA in 2 Rotary Klin is being enhanced to 8 lakh TPA, as well as have steel structurals capacity of 1.50 lakh TPA at Raipur. · FY 09 would further improve the performance, due to capacity increase and EPS is likely to cross Rs.40. · The share is presently ruling at Rs.205, which can rise to Rs.300 levels in the next 6 – 9 months. Even long term prospects are excellent. A safe bet for decent gains.