10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Archives : Old artciles

Sunday, December 27, 2009

Facor Alloys Ltd:Buy/sell/hold,growth prospects and recomendation,news and results,target price and analysis,views and outlook

Scripscan:Facor Alloys Ltd

Story:Belonging to Saraf Group, Facor was created in 2005 upon de-merger from Ferro Alloys.Company is engaged in the production of Ferro Chrome with installed capacity of 73,000 TPA which is one of the main R/M in Stainless Steel Production. World demand for same is around 6.50 mn tons, major portion being made by South Africa. Ferro Chrome prices are determined on quarterly basis by South African Chrome Producers. World demand for Stainless Steel is expected to grow at 4% which means demand for Ferro Chrome will also remain robust. Before markets crashed, share price had gone upto Rs. 21.75 and since then, has reacted 80%.In 2005, scrip was listed at Rs. 25-27. However, share price came down heavily due to following:1) Performance of the company that time was not very good.2)At that time, promoters were holding more than 90% Equity. And, under CDR scheme, promoters had been allotted these shares at par (Re. 1/-). Hence, promoters started selling heavily to realize big gains which increased the floating stock.

Facor group has 2 plants for production of ferro chrome of which,one is now under facor alloy and other is under ferro alloy. when govt. had allotted chrome ore mines (before de-merger), there was a condition in the mining agreement that these mines will be used by both plants of ferro chrome.when,one factory of ferro chrome went to facor alloy, technically 50% of chrome ore mines also should have been transferred to facor alloy. however, such a move involved huge technical/legal issues which would have taken years to sort out. hence, an understanding was reached between ferro alloy and facor alloy that facor will get chrome ore at a significant discounted price and not at market price. thus, facor alloy gets approx. 30% discount vis a vis prevailing chrome ore prices. due to rise in chrome ore prices, ferro chrome prices have risen sharply. thus, facor alloy is sort of owning (indirectly) chrome ore mines without actually owning the same and hence, it will continue to report kind of bumper profits which mining companies achieve.

Big Triggers:Now, carry forward losses will stand wiped out.Facor is likely to acquire stake in some chrome ore mines abroad in near term. With this, company will have access to additional quantity of chrome ore. Hence,company may plan to expand its Ferro Chrome production capacity.Once, announcement about overseas mines acquisition is made, Facor will also be a Direct Mining Company and scrip will be re-rated.Thereafter, company will have big growth potential.

Valuations:Not only in metal/mining sector, Facor Alloys appears one of the cheapest scrips at BSE, considering future bright prospects and mining triggers.Share price has been lying low due to lack of full knowledge about company’s actual intrinsic strength amongst investing community and low profile of the promoters.Share price has bottomed out and may only go up in stable market conditions. If, overseas mining acquisition is finalized, fy10-11 can again have huge rise in profits.Altogether as a penny priced stock looks cool.

I may be reached

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: 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.

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner