Scripscan:Tata Metaliks Ltd
cmp:103
Code:513434
Story:Tata Metaliks Limited engages in the manufacture and sale of pig iron in India. Its products are used in various applications, such as pressure tight precision castings, automobile engine blocks, crankshafts, gears, rolling mill rolls, motor and generator housings, railway, and machine tools. The company was founded in 1990 and is headquartered in Kolkata, India. Tata Metaliks Limited is a subsidiary of Tata Steel Limited.TML should be able to capitalise on buoyant pig iron prices and thus improve its OPM if it alters its raw material sourcing towards getting coking coal converted to coke from local cokeries, instead of buying coke at spot prices. Post commissioning of the DI pipe facility, its value chain would be the largest amongst pig iron players, which would result in a stronger revenue mix and impart earnings visibility. At the CMP of Rs 103, it trades at a P/E of 2.5x its FY11E earnings. Considering the buoyant pricing environment, stabilisation of both its plants, improving operational efficiency through reliance on coking coal ,we maintain our BUY’recommendation with a 12 month revised price target of Rs 145rs.
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Thursday, November 19, 2009
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