Sunday, January 14, 2018

How is Ashirwad Steels & Industries Ltd for investment ?

About the Company: Ashirwad Steels & Industries Ltd
The Company’s main business is manufacturing of Sponge Iron using Iron-Ore and Coal as the Raw Materials. It has two Sponge Iron Manufacturing Plants of which one is located at Adityapur Industrial Area, Ghamaria, Jamshedpur – 832 108, with an annual installed capacity of 30000 M.T. and the second one is located at Vill. & P.O. Veliminedu, Mandal Chityal, Nalgonda – 508 114, Telengana, with an installed annual capacity of 60000 M.T. The Sponge Iron is used as input by the Steel Melting Shops (Induction Furnaces) to produce M. S. Ingots/M. S. Billets which are thereafter re-rolled by the Rolling Mills to produce end steel products like TMT Rods/Bars, Plain Rounds, Angles, Flats, Channels, Girders, etc.
Besides the Company has two Hydrocarbon Gas Bottling Plants of which one is located at Vil. Kisnapur, Raigarh – 496 001, (Chhattisgarh), and the second one is located at Uluberia Industrial Growth Centre, Uluberia, Howrah – 711 315, West Bengal. The Uluberia based Bottling Plant has been given on lease to M/s. SHV Energy Pvt. Ltd.
Fundamental Analysis
It is a debt free company
Promoters have increased their stake in the company and are currently holding around 60% in the company
Stock is trading at 0.44 times its book value so appears undervalued.
Concerns
P/E is highest amongst the industry peers It has a P/E ratio of 40 whereas industry average is 20
QOQ profits have declined by 150%
Technical Analysis
The stock took support on trendline and has moved 50% from there now may face a strong resistance around 20.
One can make an entry if the stock closes above 20 levels for 24 targets which is another resistance above 24 we may see 30+ levels
Conclusion
Markets appear too stretched to consider this as a value buy, people who have entered around 12 levels will now consider booking profits if the trend in Nifty becomes negative.
So if I would like to enter for long term I will wait for some correction and would enter around 10–12 levels or wait for next Quarterly results to see if there is any improvement in profits.
Such analysis is shared for free on our telegram channel Faadoo Stocks and below are some interesting charts for next week.
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Happy Investing !!!
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1 comment:

  1. This Article was Quite Interesting and I am searching for Steel Ingot Price but unfortunately found this. Thanks for posting.

    ReplyDelete