Stock Matrix – ACC and SAIL

June 4, 2008

By krsna Khandelwal – A veteran market analyst


ACC will add 7 M/T capacity over next three years. This will generate additional revenue of Rs 3500 crs. This way total revenue may expected to be between Rs 14 K crs to Rs 15 K crs in FY11. Even if it maintains net profit at about 10% of sales against 19% of sales at present, it will be able to post EPS of Rs 80/- per share. So, why have sleepless nights if ACC is going down. You may pick more of it. Though not a possibility yet if ACC becomes a take over target the acquirer will have to pay not less than Rs 2000/- per share.

ACC is cash rich too and would be looking for the expansion in capacity by acquisition of other companies/plants as well as expand through green field projects. Present locations are seeing expansion wherever feasible. As per the replacement theory its capacity of 22.4 M/T may well be valued at between Rs 20 K crs and Rs 25 K crs . This gives it an approx. value of Rs 1200/- per share .

Similar is the case with ‘SAIL’ and therefore I see some method in the madness in the present day trading in these two scrips.

According to Census 2001 , India has 35 cities with over a million population. It is estimated that these cities would require $29 bn to upgrade the transport infrastructure.

The auto sector has posted decent sales growth in the month of May 08. All the segment in auto sector have performed better.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market


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