Thursday 6 November 2008

Buy Sarda Energy, target of Rs 90: Sunidhi Securities

Sunidhi Securities & Finance has recommended a buy rating on Sarda Energy and Minerals with a target of Rs 90 in its November 4, 2008 research report. "During Q2FY09, sales have gone up by 158 per cent to Rs 344 crore whereas net profit has shot up by 93 per cent to Rs 46.6 crore. SEML is one of the largest manufacturer and exporter of Premium Grade Ferro Alloys from India. The growth in steel industry, where ferro alloys are used as additives, has pushed the demand of ferro alloys globally."

"The company is strengthening the raw material linkages, which will sharply reduce the cost of production and lead margin expansion by FY10. The company’s integrated pellitization plant, coal mines and captive power plant would significantly enhance profitability in the coming years. The company aims to develop a steel-cum-power business model by increasing its power capacity by 48MW to 213MW in the long run. This will lend stability to earnings as captive power supply will reduce the cost of steel making, while merchant power sales will significantly offset the earnings volatility inherent in the steel business. We recommend BUY with a target price of Rs 90 in the medium term," says Sunidhi Securities & Finance's research report.

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Source: Moneycontrol

Posted by Harsh at 08:15

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