PRAKASH INDUSTRIES
LIMITED
IS IT A POTENTIAL
MULTIBAGGER
Prakash Industries Ltd was
founded in the year 1980 with focus on Iron ore Mining, Steel and Power, PVC
Pipes & Fitting and Flexible Packaging.
Iron
Ore Mining - procured from private mines in Odisha,
with long term business relationship.
Company has executed a lease agreement
with government of Odisha to lease a mine located in Sirkagutta, Keonjhar
district, Odisha, for 50 years.
It is trying to procure allotment of an
iron ore mine in Kawardha, Kabirdham district, Chhattisgarh, for a period of 50
years.
Coal Mining- Currently, it is meeting its 100% coal requirement through Long Term Coal Linkages from SECL (a subsidiary of Coal India Limited).
Company is prospecting to
add suitable coal mines in the near future.
STEEL- producing
high quality Steel Billets /Blooms in the Steel Melting Shop & through
continuous casting. The prime raw materials used are Sponge Iron, Pig Iron and
MS scrap.
Value
addition through captive consumption of raw materials and integrated operations
Continuous
improvement in performance and quality with innovations in system and
processes.
Intermediate
Products
✓ Sponge Iron
✓ Steel Blooms And Billets
✓ Ferro Alloys
Finished Products
✓
Wire Rod & HB Wires
✓
TMT Bars
✓
Structural Products
MANAGEMENT TEAM :
Sri
V.P.Agarwal is the Chairman of the Company. Sri Vikram Agarwal is the CEO &
MD. Sri P.L.Gupta is the CFO and Director of the company.
ANNUAL RESULTS
During FY2018, Prakash Industries has achieved Net Sales of
Rs. 2935 Crores and EBIDTA of Rs. 596 Crores, reflecting growth of 35% in
sales and 125% in EBIDTA over the FY 2017. Net Profit for FY2018 zoomed by
392% to Rs. 384 Crores as against Rs. 78 Crores in FY 2017
QUARTERLY RESULTS
During Q4 FY2018, Net Sales of Rs. 910 Crores and EBIDTA
of Rs. 210 Crores, reflect a growth of 45% and 139% respectively over Q4
FY 2017. Net Profit for Q4 FY2018 zoomed by 347% to Rs. 152 Crores as
against Rs. 34 Crores in Q4 FY2017. Further, Company’s rating has been
upgraded to “CARE BB” with stable outlook.
|
PRAKASH IND
|
Mar '18
|
Dec '17
|
Sep '17
|
Jun '17
|
Mar '17
|
YOY
|
QOQ
|
|
Net Sales
|
910
|
726
|
648
|
650
|
628
|
45
|
25
|
|
N P T
|
152
|
101
|
66
|
59
|
34
|
343
|
50
|
|
Equity
|
157
|
153
|
153
|
149
|
139
|
13
|
3
|
|
Diluted EPS
|
7.79
|
6.6
|
4.29
|
3.96
|
2.29
|
240
|
18
|
|
MP
|
167
|
||||||
|
PE
|
5.36
|
||||||
|
VOLUME
|
1881294
|
ON NSE
|
|||||
|
PRICE TREND
|
|||||||
|
AS ON 05.05.18
|
1 week
|
2 week
|
1 month
|
3 month
|
6 month
|
9 month
|
1 year
|
|
Price
|
218
|
208
|
183
|
206
|
140
|
134
|
87
|
|
Gain
|
-7.01%
|
-2.05%
|
11.05%
|
-1.05%
|
45.39%
|
51.73%
|
133.16%
|
Future Outlook:
- Sales Realisation at All Time High
Steel industry is in the midst of multi- year up-cycle
driven by higher spreads. Presently, sales realisation is at All
Time High, as prices have improved by over 30% from the level of April,
2017.
- Targeting Four Times Revenue at around Rs. 12000 Crores by FY 2023
Company has undertaken expansion plans to increase its Integrated steel plant capacity at
CHAMPA, CHATTISGARH from 1.20 Million tonnes per annum to 3.00 Million tonnes
per annum over the next 5 years through Internal accruals.
· Expansion in Sponge Iron, Steel and
Power co-generation capacity in FY 2019
Company successfully commissioned 0.20 Million tonnes per
annum Sponge Iron Rotary Kiln alongwith 15 MW Waste Heat Power
co-generation in April, 2017. Further, in current year, Company is
expanding the capacity of Sponge Iron Plant by 0.40 Million tonnes per
annum i.e. 0.20 Million tonnes per annum by September, 2018 and 0.20
Million tonnes per annum by March, 2019 and power co-generation
capacity by 30 MW, i.e. 15 MW by September, 2018 and 15 MW by March, 2019.
- Efficient Raw Material Management
Company has signed Long Term Fuel Supply Agreement with Coal
India Limited for its coal requirements at stable prices. It has tied up
the supplies of iron ore from Odisha miners and NMDC on long term basis.
- Captive Iron Ore Mining
The Sirkaguttu Iron Ore Mine of the Company in Odisha is
going to commence production in current quarter. Kawardha mine in
Chhattisgarh is likely to be operational by April, 2019.
- PVC Pipe Division
Company is doubling its PVC Pipes and Fittings production
capacity by next year.
The Company, in its newly ventured Flexible Plastic
Packaging business, will manufacture high performance barrier films and
laminates that find application in packaging of food, beverages, oil,
personal care and pharmaceutical products. Production is likely to commence by June, 2018.
Demerger of the PVC Pipe business
is progressing fast as NSE & BSE have already conveyed their consent
and other clearances are in progress.
Preferential Issue to Promoters
Company had issued Convertible Equity Warrants (Warrants) to
the Promoters for Rs. 208 crores.
Forward Guidance (BY COMPANY):
Revenue is likely to grow over 60% in FY 2019(YoY) to
around Rs. 4,700 crores with improved EBITDA margin of around 25% owing to
expansion, higher utilisation of capacities, better sales realisation and start
of mining operations at its Sirkaguttu Iron Ore Mine in Odisha this
quarter.
FINAL COMMENTS :
All these details are extracts
from the company’s latest Press Release etc. Looking at the current scenario of
the steel Industry in India, the energetic Management team, current impressive
profitability, future expansions on the cards and so on, the company looks like
a Potential Multibagger of the future. However, Investors have to make their
own analysis and assessment beyond this before they make their decisions.
MY YOUTUBE VIDEOS :
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