Scripscan:Bhushan Steel Ltd
cmp:400
Traded in:Nse-bse
Story:The company derives more than 70% of its revenue from cold rolled and galvanised steel products. Currently, it has a total capacity of 900,000 tonnes of cold rolled products and 465,000 tonnes of galvanised steel products. The bulk of its revenue comes from automobile and white goods sectors, which predominantly use flat products.The company has three plants strategically located in different parts of the country. The Dhenkanal plant in Orissa is close to the raw material supplier and produces sponge iron and billets, the primary steel products. The Khopoli plant in Maharashtra and Sahibabad plant in Uttar Pradesh are close to the two auto hubs, Pune and Gurgaon. These two plants primarily manufacture cold rolled and galvanised products used by auto.The Indian economy has raised the spending power of corporates and households. While the former are using their higher earnings to set up fresh capacities, the latter are utilising higher disposable incomes to acquire new cars or buy a house.Either way, this trend has boosted the consumption of steel in the country, particularly in sectors like infrastructure , white goods and automobiles. This means more business for Bhushan Steel, which manufactures flat steel products. With steel demand expected to keep growing at a fast clip, investors are advised to accumulate Bhushan Steel’s stock with a 2-3-year horizon.The returns from the company’s first phase of investment worth Rs 11,000 crore will start accruing from FY10 onwards.The eps for 2010 is expected to be around 265 for the company At the current market price of Rs 400 the forward P/E multiple for FY10 works out to 1.5x.Altogther a good buy.
Important Disclaimer&Privacy policy
This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com
Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
