FACOR STEEL

Company Overview:

a company still in its infancy being just 4 years old, is already beginning to look like a Stainless Steel (SS ) major. Facor Steel is a specialty steel long products manufacturer, having a highly sophisticated state of the Art plant. SS Long products cater to automobile, railways,defense and engineering sectors. Its products include SS, Alloy steel,Valve steel, Carbon manganese steel,Silico manganese steel etc. They are exported to several European countries, USA and the Middle East.

Presently the company has capacities of 60,000 MTPA of quality alloy steel and Stainless Steel with 2 rolling mills having a capacity of 80,000 MTPA. The company has decided to expand its SS capacity by 500,000 MT, and also set up a 250 MW coal based power plant costing Rs. 2500 crores

Company’s financial are showing a marked improvement YOY with a top line growth in excess of 25% .

With an equity capital of Rs. 20.6 crores divided into 20.6 crore shares of Re.1 FV, the market capitalisation of the company is just about Rs. 93 crores at CMP of Rs. 4.5 .With a 9 fold expansion in SS capacities and 250 MW coal based power plant, an exponential growth is expected in the next 3 years.

Even for FY-08 the company is expected to have a turnover of Rs 500 crores+ with PAT of Rs. 8+ crores and EPS of 0.4

Thus the share appears to be good long term value buy.