Stock Idea - Godavari Power and Ispat Ltd.

Scrip: - Godavari Power and Ispat Ltd
CMP: - 143
BSE Code: - 532734
52 week H/L: - 376.50 - 141.00
Market cap: - 401.83

Summary -
Initially it produced only sponge Iron , but then over a period of time it diversified into value added products like billets, HB wires and captive power plant run on waste gases emanated from its own kilns. It commenced with an annual production of 105000 tpa of sponge Iron and since then has increased its capacity five fold to become one of the largest producer of sponge Iron in India. Billet and HB wires are produced through its wholly owned subsidiaries.
Company has signed an MOU with chattisgarh government for an investment of 1570 crores for its expansion plans . Company is into manufacturing of sponge iron , steel billets , ferro alloys , captive power generation , wires rods and now about getting approval for mining is going to be a fully integrated manufacturer of steel . The company is all set to get approval for aridongri mine in chattisgarh .A consortium led by GPIL has been allocated four coal blocks at Nakia and Madanpur in Chhattisgarh with 243 million tonnes of total reserves, of which, GPIL’s share is 63 million tonnes . Complany is planning to increase its power capacity 1000 MW

Key Financials: -
A mere maket cap of 401 crores seems much lesser for the company and GPIL seems strongly undervalued . Company clocked a sales revenue of 950 crores resulting in a n eps of 36.50 rs. Managment is targeting at a sales of 1400 crores for FY09 . At the CMP of Rs 143, the stock is trading at 4.39 its FY09 earnings and 2.7x FY10E EPS of Rs 33.84. If company gets nod for mining further EPS of 25 rs can be added to FY 10 earnings .
Further more adding the value of new investments worth 1570 crores and power expansion plans which is about to happen in next four years . Stock has very bright prospects and will outperform the markets in a big way .

Happy Investing.
Stock Quotes Here.