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CEMENT / RMC / STEEL & POWER:
HUGE INVESTMENTS ARE PLANNED IN INDIA POWER SECTOR, PORTS, AIRPORTS, RAIL CORRIDORS, REAL ESTATE,METROS
IN ALL THE MAJOR CITIES OF INDIA AND SUPER HIGHWAYS. THE INVESTMENT IN INDIAN INFRASTRUCTURE INDUSTRY IS EXPECTED TO
GROW AT CAG@ OF APPROX. 20% PA FOR THE NEXT 3-5 YEARS. THE INVESTMENT IN VALUE TERMS IS EXPECTED TO GROW FROM OVER
Rs. 2,00,000/- Cr. IN 2007 TO OVER 3,00,000/- Cr. IN NEXT TWO YEARS. GUJARAT ALONE HAS COMMITTED A SUM OF OVER Rs.
50,000/- Cr. IN DEVELOPMENT OF NEW PORTS ALONG ITS 1600 KM COSTAL LINE AND AN ADDITIONAL SUM OF Rs. 1,80,000/- Cr.
FOR THE DEVELOPMENT OF SEZ's ALONG THIS COSTAL LINE.
IN LINE WITH THIS, INDIAN CEMENT , STEEL & POWER CONSUMPTION IS EXPECTED TO GROW
@ 9-11 % FOR THE NEXT FEW YEARS. WITH IN THIS SECTOR READY MIX CONCRETE (RMC) USAGE IS EXPECTED TO GROW @ CAGR OF 30-35%.
Per capita steel consumption in India is only 38 Kg vis-a-vis Global average of 200 Kg. Power Sector
alone requires a capacity addition of approx. 12000 to 15000 MW per annum for the next 10 years to meet the 8-9 % GDP growth
rate of Indian economy. This will need a huge investments to the tune of 1,00,000 Cr. to 1,20,000 Cr. per annum
for the next 10 years in the power sector alone. This will cascade into heavy requirement of up- stream and
down stream Industries such as steel,cement, castings, transmission towers, equipment manufacturing industries such pumps ,
compressors, motors, and transformers.
HERE ARE FEW VALUE PICKS:
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118/- as on 23.1.08
Buy more.
5.6.08:
Price as on 4.6.08 is Rs. 96/-. Add more.
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EPS for 2008/- is Rs. 38/-. Expected EPS for 2011 is Rs.75/-. Expected price range 300/- To
350/- as on 4.7.10
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5.6.08:
EPS for 2007-08 is Rs.38/-. Expected EPS for 2009-10 is Rs. 45/- to 55/-.
Expected price range is 350/- To 450/- as on 4.6.10.
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Birla Corporation Ltd.
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Rs.272/- as on 20.1.08.
Buy.
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Rs.220/- as on 21.1.08.
Buy
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EPS for 2008 is Rs.51/- and expected to move up to Rs.100/- by 2011. Price projections is Rs.400/-
to 500/- as on 18.7.10.
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Godawari Power and Ispat Ltd.
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Rs. 188/- as on 14.03.08.
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Strong buy.
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Rs. 400/- to 550/- as on 14.03.09. Expected EPS Rs. 35/- to 40/-. Co has made huge investments in
mineral resources which gives it a strategic cost advantage in times to come.
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Tata Steel: 2007-08
EPS is Rs. 67/- which is expected to go up to Rs.130/- by 2011 on stand alone basis. Price as on 8.8.2008
is approx. Rs. 651/-. Buy around Rs. 600-650/-. Expected Market price by 2010 is Rs. 1200/-.
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DISCLAIMER: All investments in equity shares are subject to market
risks,sector specifc risk,risks due to political & economic environment. The web site is
, thus, not responsible for any loss to any individual or otherwise, that may arise due to any investement done in above
recommendations.However, due care is taken to provide authentic information.Projected price is based on our investment
analysis which,due to the above risks may or may not be not be achieved.
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