BGR Energy
It has recorded impressive performance with the stock moving up by nearly 500% since March 2009, on the back of its move up in the value chain as an engineering, procurement and commissioning (EPC) contractor from a balance of plant (BoP) contractor. The performance is backed by its financials also with sales and profit going up by more than 60% during FY10 and tripling of profits for June 2010 quarter. With a current order book of Rs 9,400 crore, nearly three times FY10 sales, the company is comfortably placed to maintain its growth rate and is fairly attractive at the current valuation.
It has recorded impressive performance with the stock moving up by nearly 500% since March 2009, on the back of its move up in the value chain as an engineering, procurement and commissioning (EPC) contractor from a balance of plant (BoP) contractor. The performance is backed by its financials also with sales and profit going up by more than 60% during FY10 and tripling of profits for June 2010 quarter. With a current order book of Rs 9,400 crore, nearly three times FY10 sales, the company is comfortably placed to maintain its growth rate and is fairly attractive at the current valuation.
Return 8.3x Stock Price 801.4 PE 23.9 Market Cap 5779cr
Bhushan Steel
Recent run up (37% in the last month) in the stock price is largely driven by technicals due to its stock splits and increased investor expectation from the backward integration. In the coming 3-4 years when the captive mining commences, the company will move to the higher level. Expectation of higher profit in FY11 due to its second phase of expansion is already factored into the stock price. In the near term, the stock is not expected to continue its momentum. The company has a high debt on its books and it will be difficult for the company to raise further debt to fund its third and fourth phase of expansion. So the run up in this stock may not continue.
Bhushan Steel
Recent run up (37% in the last month) in the stock price is largely driven by technicals due to its stock splits and increased investor expectation from the backward integration. In the coming 3-4 years when the captive mining commences, the company will move to the higher level. Expectation of higher profit in FY11 due to its second phase of expansion is already factored into the stock price. In the near term, the stock is not expected to continue its momentum. The company has a high debt on its books and it will be difficult for the company to raise further debt to fund its third and fourth phase of expansion. So the run up in this stock may not continue.
Return 9.6x Stock Price 518.5 PE 12.7 Market Cap 11009cr
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