powerfulpicks advice: My 18th August call on Surya Roshni read as below and my outlook remains unchanged:
"New Buy Call from powerfulpicks: BUY SURYA ROSHNI ON DIPS at 101 for a 6-month target of 121 (nearly 20%)."
The company has 2 lines of business: steel and lighting. And they have a 20-year track record of uninterrupted dividend payment. They are asset-rich in assets and have a huge land bank in Bahadurgarh, which they are planning to develop as real estate. Company has started a new plant in Gujarat to make spiral welded pipes. This will add to the topline and bottomline of the company in FY11. They are also going to setup a steel plant in Karnataka with an investment of Rs 20,000 crores. The market cap of the company is just about Rs 190 crore and sales to equity is just about 60 times which means even a 1% increase in net profit margin would increase its EPS by close to Rs 6-7." And you can understand the impact of such EPS increase on its market price.
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