Equity Watch

FACOR STEEL catch it NOW

Facor Steel,a company in its infancy being just 4 year old is already beginning to look like a Stainless Steel (SS ) major.Facor Steel is speciality steel long products manufacturer having one of the most modren State of the Art plant .SS Long products cater to automobile, Railways,defence and Engg sectors. Its products include SS, Alloy steel,Valve steel, Carbon manganese steel,Silico manganese steel etc.Products are exported to European countries ,USA and Middle East.

Presently the company has capacities of 60,000 MTPA of quality alloy steel and SS with 2 rolling mills having capacity of 80,000 MTPA.Company has decided to expand its SS capacity by 500,000 MT,and also set up a 250 MW coal based power plant costing Rs. 2500 crores 

Company’s financials are showing a marked improvement YOY with top line growth in excess of 25% .

 

Type UnAudited UnAudited
Date Begin 01 Apr 06 01 Apr 05
Date End 31 Mar 07 31 Mar 06
Description Value(Rs. million)
Net Sales 4204.14 3311.01
Other Income 65.03 66.28
Total Income 4269.18 3377.29
Expenditure -4114.8 -3245.82
Operating Profit 154.38 131.47
Interest -59.01 -48.54
Gross Profit 95.37 82.93
Depreciation -31.43 -31.68
Profit before Tax 63.94 51.25
Tax -11.84 -4.26
Profit after Tax 52.11 46.99
Net Profit 52.11 46.99
Equity Capital 206.52 206.78
EPS 0.25 0.23
Nos. of Shares – Non Promoters 10040942 9054021
Percent of Shares – Non Promoters 4.86 4.3
Result Type A A
  Notes Notes

Financials reproduced from bseindia

With equity capital of  Rs. 20.6 crores divided into 20.6 crore shares of Re.1 FV, market capitalisation of the company is just about Rs. 93 crores at CMP of Rs. 4.5 .With 9 fold expansion in SS capacities and 250 MW coal based power plant ,an exponential growth is expected in the next 3 years. Even for FY08 Company is expected to have a turnover of  Rs 500 crores+ with PAT of Rs. 8+ crores and EPS of 0.4 .Thus the share appears to be good long term value buy.

Buy is recommended at CMP of Rs. 4.5 for 3 years HOLD

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

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4 thoughts on “FACOR STEEL catch it NOW

  1. Hi Ashok,

    As you said the company has plans of a capex of 2500 crores. But please can you tell me how the company will get the money for the capex. The company has just come out of BIFR and has a networth of around 25 crores. The cash flow will in no way be able to support even 10% of the capex.

    Regards,
    Ranjit kumar

    Like

  2. HI Ranjit,

    Yours is a million dollar question,and I salute you for that. Very few investors ask such questions. However in the past in case of Facor Alloys and Ferro Corp the promoters have brought in investors to take stake in the Company.And there is no dearth of VC and other investors to support power projects when it comes to India.But definitely I shall ask this question in the AGM in case I am there.

    Announcement to BSEINDIA

    Further, with the said discharge from BIFR, the Facor Group of Companies are now moving ahead with the envisaged expansion plans involving investment of Rs 2500 Crores for setting up a Coal based 250 MW Independent Power Plant and 0.5 Million TPA Stainless Steel Plant.

    As part of its forward integration the Company (i.e. Facor Steels Ltd) is also setting up a 2000 Tons hydraulic Forge Press for production of Forge Round Bars at its existing Steel Plant with a installed capacity of 12000 MTPA. The total cost of the project is estimated at Rs 25 Crores and the project is expected to be commissioned by April 2008.

    Presently the Company has a facility of making 60000 MTPA of quality Alloy Steel & Stainless Steel with two rolling mills having capacity to roll 72000 MTPA and Bright Bar facility having capacity of 10000 MTPA. The turnover and net profit of the Company for the year 2006-07 was Rs 419.77 crores and Rs 5.39 crores respectively. With the commencement of commercial production of Forged Round Bars it is expected that the turnover of the Company would exceed Rs 500 crores and profitability would also improve substantially.

    Like

  3. Fantastic blog! I truly love how it is easy on my eyes and also the information are well written. I am wondering how I may be notified whenever a new post has been made. I have subscribed to your rss feed which ought to do the trick! Have a nice day!

    Like

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