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Date:
November 26, 2008
Ref. No. MPML/BB/205/062/2008
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Dear
Sir,
Today
on 26th Nov the benchmark indices witnessed smart rally in last
one hour of trade, after trading choppy since the beginning of
trade. The Sensex closed above 9000 mark and the Nifty shut shop
above 2700 levels. The sentiment turned positive on the hope that
there may be rate cut by RBI following China, as the China has
cut CRR by 100 bps to 16% from 17%. They also lowered lending
rates to 5.58% from 6.66%. China's central bank slashed lending
rates by most in 11 years.
In this process there is one recent development in china. They
have now started Importing Iron ores for the production of steel.
The recent down fall in steel & Iron Ore was due to
big fall in Demand where china had almost stop importing. Now
as they have started importing the biggest iron ore producing
and exporting company Sesa Goa will be benefit the most. Hence
we suggest you to buy Sesa Goa Ltd at present market rates.
Sesa
Goa Ltd. :
| CMP |
71 |
| 52
Week High |
219 |
| 52
Week low |
60 |
| Market
Capital |
5514
Cr |
| P/E |
2.46 |
| EPS |
28.48 |
Sesa
Goa Limited, the flagship company of Sesa Group is India's
largest exporter of iron ore in the private sector. Iron
ore business contributes to about 80% of the company's revenues.
The company has access to over 200 million tons of
iron ore reserves in Goa, Karnataka and Orissa. It has also
developed an energy recovery technology to manufacture coke,
compliant with advanced global emission norms.
Sesa Goa announced a phenomenal rise in its
consolidated net profit for the second quarter ended September
2008. During the quarter, the profit of the company
rose 3.61 times to Rs.3,366.20 million, from Rs.931 million
in the same quarter, last year.
The consolidated income rose 2.29 times to Rs.9,211.20 million
for the quarter ended Sep. 30, 2008, as against Rs.4,005.50
million for the quarter ended Sep. 30, 2007.
While
on a standalone basis, the company disclosed 3.72 times rise
in net profit at Rs 3,060.80 million for the quarter ended
Sep. 30, 2008, as against Rs 821.40 million for the quarter
ended Sep. 30, 2007.
Total
Income increased 2.51 times to Rs 8,767.60 million for the
quarter ended Sep. 30, 2008 from Rs 3,492.10 million for the
quarter ended Sep. 30, 2007.
The
reason behind the recent down fall in this stock is reduction
in the imports from China. But now that china has again started
Importing Iron Ores for steel production, the company's revenue
will again raise.
The
company has a strong management bandwidth and also has shown
strong financial growth in the past. The topline and bottomline
have grown consistently in the last five years. The stock
is currently trading at Rs71 it is up 11 points from its 52
week low. We suggest you to buy this stock at current market
level.
Awaiting
your Quick Response.
Thanks & Regards,
PMS Department
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