Saturday, September 15, 2012

GODAWARI POWER AND ISPAT ( GPIL) - BUY





Companies showing resilience during the tough times of any industry surely deserves  special attention.Such companies will out perform in stock market when the fortunes of that particular industry turned around. Godawari Power and Ispat (GPIL)  is one such company which is operating mainly in Steel and also in Power.We are aware companies from steel sector is out of favor of the market right now due to various issues like shortage of raw material on account of mining related issues,interruption in  power supply and power cuts..etc.Even the demand is also soft now on account of lower construction activities ,we can’t ignore the steel industry as it has  a vital role in nation building.GPIL is the flagship company of Raipur based  HIRA Group .This is one of the very few companies in steel sector operating in the entire value chain which includes sponge iron, billets, Ferro alloys, captive power, wires rods, steel wires, fly ash brick..etc.Another  major factor distinguishing this company from others is the fact that this company is not spending a single rupee for purchasing power from outside .It is fully backed by captive power production facilities and also selling excess power  to others .GPIL also having captive mining facilities from two mines allotted for them which is minimizing the uncertainties related with iron ore supply.Now GPIL is increasing its pelletisation capacity from 600000 TPA to 1800000 TPA by setting up new Iron Ore Pellet plant and also setting up 50 MW solar thermal power project  at Jaisalmer ,Rajasthan.Financial closure for both these projects already completed and power selling agreement signed with NTPC.In the financial side company is posting excellent performance .In the latest June quarter GPIL posted a sales of Rs.602 Cr an increase of 22% compared with same period last year and a net profit of Rs.51 Cr, almost 65 % increase from last year and an  EPS is Rs.15/-. Company also declared a dividend of 25% for FY 2011-12. Promoters having 63% stake in this company .Steel industry is a power intensive one and there is every chance for shortage of power in our country for many years due to slow decision taking process in power industry.In such a situation ,companies backed by full captive power production facilities will get an edge over others.In addition to this, more than 80 % of its iron ore requirements are met by production from captive mines which ensure raw material supply amid tight supply situation due to mining ban and other environmental issues.In nut sell GPIL will be one of the biggest beneficiary of power and iron ore shortage in steel industry.It is one of the best mid cap  pick from this sector and eligible to include in your core portfolio with a long term view @ CMP of Rs.117/-. Stock listed both in BSE and NSE.

55 comments :

  1. Why a Few Succeed in the Stock Market When Everyone Else Fails.BUT WITH YOUR INSIGHT,HONESTY,AND SERVICE.ALL OF US CAN SUCCEED.THE PAYALS,AND HBJS CAN GO FOR ---- R-----H SIR THANK YOU.

    ReplyDelete
    Replies
    1. Thanks. What's your take on ANANT RAJ industries and BRIGADE ENTERPRISES. Both of them have appreciated more than 50% in last 4 months and reports are that it is driven y fundamentals.
      Thnx in advance

      Delete
  2. Great Research....sir,
    dou you have any comment on THIRUMALAI CHEMICALS LTD.

    ReplyDelete
    Replies
    1. Not a bad one .An investor friendly company but product price showing wide fluctuations.

      Delete
  3. Sir

    Whats your view on Enkie Wheels

    Thanks
    Sumeet

    ReplyDelete
  4. Excellent analysis Mr Value Pick. Being a doctor I have picked up some shares of Themis
    Dr Suvasish Chakraberty

    ReplyDelete
  5. Operating Profit margin of the company has gone down in last year may be due to increase in raw material cost substantially.
    Does this have any impact on future revenue?

    Girish

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    Replies
    1. Not only because of that ,On a consolidated bases margin impacted by the initial teething problems of its subsidiary which is now stabilised .Expecting more volume driven growth forward.

      Delete
  6. hi just wanted after the government made a move and have taken initiative in cylinder gas do u think its a good time to move into eastern gases

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  7. Hi

    I have recently purchased Greaves cotton and Persistent systems. Would like to have your views on them in case you track them.

    Some time ago u mentioned Ion exchange for buy. I researched it out and being an Architect I guess Vatech wabag is better placed with better technologies. What's your opinion.

    Thanks otherwise and God bless u.

    ReplyDelete
    Replies
    1. No change in my previous views on Persistent .Va Tech is also a good company.Not tracking Greaves cotton

      Delete
  8. Hello sir,
    Thank you for your recommendations.
    What's your view on Rubfila International ?

    ReplyDelete
  9. Dear ValuePick,

    After announcing poor Q4 results HEG has announced good Q1 result. What is the reason for such fluctuations. Is the management hiding something or lack transparency?

    Best Regards,
    Shankar.

    ReplyDelete
  10. VP Sir,

    Thank you for good recommendations. GPIL is now trading cum dividend of Rs.2.50 (BC - 22nd to 29th of Sep.2012).

    Yours

    S.Venkatesh.

    ReplyDelete
  11. Respected VP Sir,
    First of all I would like to thank You and express my gratitude for ur hardwork and humbleness. I am regular follower of ur views.

    Sir can u pls express ur views on Panacea Biotec and Aarti Drugs.
    Thanks,
    Nirav S. Karia

    ReplyDelete
    Replies
    1. Panacea may face some profit booking .Not tracking Aarti drugs

      Delete
  12. Wonderful research sir.
    Thanks for the views sir.

    ReplyDelete
  13. Dear sir,
    what is your view on Repro india which is showing good results.

    ReplyDelete
    Replies
    1. Nothing wrong in medium term,but the trend is towards digitalisation and online contents ,so in long term..

      Delete
  14. Sir,
    you views on Sanghvi Movers which is the largest crane rental company in India and 4th largest in Asia and 7th largest in world.
    Available at low value due to Infra sector being down due to govt reforms.

    Do you see value at current levels for long term 2-3 years?

    ReplyDelete
    Replies
    1. More than once commented about this stock,pls search the blog.

      Delete
  15. What is your view on Pidilite ? Time to book profits

    ReplyDelete
  16. Sir,
    Do you think spicejet can be hold for long term? I have 3500 and presently at CMP its giving me 16% profit. Govt okays 49% FDI in aviation, can give some jump from current market price. I am getting confused, if i should hold for long term or should exit with some profit?
    If you could share your views would be great.Thanks.
    Regards,
    NQA

    ReplyDelete
    Replies
    1. This stock already covered,no change in views.

      Delete
  17. You had recommended Heritage Foods at 234. It is now at 280. Recent quarter's numbers show that profitability of the dairy segment is improving but the retail is still a drag. What are your thoughts on this company for the short-medium term?

    ReplyDelete
    Replies
    1. Nothing to say about short term,hold it for medium to long term

      Delete
  18. Sir what are your views on Balkrishna Industries?

    ReplyDelete
  19. Dear Sir,

    I wold like to have your valued opinion on D-link India for long term.

    B K Paul.Bangalore

    ReplyDelete
  20. please comment about fortis health care.

    ReplyDelete
    Replies
    1. Fit only for long term genuine INVESTORS.

      Delete
  21. sir, whats your view on sunflag iron and steel and sunshield chemicals
    thanks in advance
    senthil

    ReplyDelete
  22. DUE TO TIME CONSTRAINT I COULD NOT ATTEND MANY COMMENTS THIS TIME ,PLEASE EXCUSE.

    ReplyDelete
  23. hii sir ,
    hats off to you


    i'd like to know your views on uflex .

    ReplyDelete
  24. Hello VP sir,
    I had asked for "Sanghvi Movers" which is a Crane rental company and I did search your blog. Some one had asked for "Sanghvi Forgings" for which you mentioned its operator driven stock.

    "Sanghvi Movers" & "Sanghvi Forgings" are different company and different group. Sanghvi Movers seems better priced and placed for Infra and specially for Power projects so wanted your view on it.

    Thanks

    ReplyDelete
  25. Yes Shailesh I know it .Three times I mentioned I am not tracking Sanghvi Movers.

    ReplyDelete
  26. I have 200 Petronet LNG @143. should i sell it?

    ReplyDelete
  27. hello sir,

    i have 200 Petronet LNG @143, should i sell it now?

    ReplyDelete
  28. Dear Sir,

    I have missed the train on BLISS GVS Pharma which i have been tracking and wanting to BUY, but some how missed on it.

    Can it be bought in Dips??? (incase you are tracking)...
    Or else would Lupin be a Buy on Dips??

    I like the Pharma space hence asking on this space sir.

    ReplyDelete
  29. Thank you sir, finally I found one NSE pick...:) ...

    ReplyDelete
  30. what abt voltas .holding from 91 .should i book profit.and plz tell abt vadilal industries

    ReplyDelete
  31. what abt bayer crop science.can i buy it now

    ReplyDelete
  32. Sorry to disturb. I would like to know your expertise idea if you are tracking Tata sponge iron. Because of the current issue of Rs 6,000-cr fine on Tata Steel for illegal mining by odisha govt. I think it will have impact on tata iron since they are main promoter of the same. Pls need your advise sir.

    ReplyDelete
  33. Dear VP
    What's your view on Anant Raj , Brigade Enterprises and Global Offshore? Thanks

    ReplyDelete
  34. Sir,

    I took a position in Godawari in September 2012. Now the stock is down by 30%. What is your recommendation? Can you do an update on this stock? Thanks,

    BPrasad

    ReplyDelete

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