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Company profile:- Rohit Ferro Tech is engaged in the
manufacturing of chromium and manganese-based ferro alloys,
such as high carbon ferro chrome, silico manganese and ferro
manganese. In October 2003, the company commenced
commercial production and has grown from strength to strength
over the last decade.
Investment Rationale
To benefit from the growth in the Steel Industry
• It is one of the major ferro alloys manufacturer in India as
well as having an important presence in the international
arena with exports contributing 70% of its produce.
• With the demand for global steel expected to 1625 million
tons by CY14 and in India to about 110 million tons by
FY19-20 the demand for ferro alloys is expected to remain
buoyant.
• The steel industry is expected to grow on the back of heavy
investment in infrastructure projects and auto.
Backward Integration
• Acquisition of coal mines in Indonesia.
• Setting up of captive power plants.
Through these measures the operating margins of the company are
expected to improve over a period of time
Forward Integration
Setting up of a 100,000 MTPA stainless steel facility in Bishnupur,
West Bengal. It is an attempt to forward integrate and to work
extensively on the front of end use of the Ferro Alloys.
Outlook & Recommendation:- We are positive on its long
term growth plans down 2-3 years time period and have
valued the company with the Discounted Cash Flow Method
by taking a WACC of 10.50% from FY11E to FY15E and a
terminal growth rate of 3% thereafter and have arrived at a
fair value of Rs 80 per share implying a 67% growth from the
current market price to be reached in the next 18 months time
period.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Company profile:- Rohit Ferro Tech is engaged in the
manufacturing of chromium and manganese-based ferro alloys,
such as high carbon ferro chrome, silico manganese and ferro
manganese. In October 2003, the company commenced
commercial production and has grown from strength to strength
over the last decade.
Investment Rationale
To benefit from the growth in the Steel Industry
• It is one of the major ferro alloys manufacturer in India as
well as having an important presence in the international
arena with exports contributing 70% of its produce.
• With the demand for global steel expected to 1625 million
tons by CY14 and in India to about 110 million tons by
FY19-20 the demand for ferro alloys is expected to remain
buoyant.
• The steel industry is expected to grow on the back of heavy
investment in infrastructure projects and auto.
Backward Integration
• Acquisition of coal mines in Indonesia.
• Setting up of captive power plants.
Through these measures the operating margins of the company are
expected to improve over a period of time
Forward Integration
Setting up of a 100,000 MTPA stainless steel facility in Bishnupur,
West Bengal. It is an attempt to forward integrate and to work
extensively on the front of end use of the Ferro Alloys.
Outlook & Recommendation:- We are positive on its long
term growth plans down 2-3 years time period and have
valued the company with the Discounted Cash Flow Method
by taking a WACC of 10.50% from FY11E to FY15E and a
terminal growth rate of 3% thereafter and have arrived at a
fair value of Rs 80 per share implying a 67% growth from the
current market price to be reached in the next 18 months time
period.
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