Saturday, February 18, 2012


Prakash Industries is a Haryana based multi division company. Company’s main operation is in steel sector and having presence in Coal mining,Power,Ferro Alloys,PVC Pipes..etc. Company ‘s  integrated steel plant is located in  Champa , Chhattisgarh. Company has been allotted three coal blocks at Chotia, Madanpur & Fatehpur and already started operations in Chotia.Using  Waste Heat Recovery Boilers Company currently operating a 100 MW captive power plant  and planning to expand the capacity to 725 MW.Prakash also got permission to start operations of  Iron Ore mines in Chattisgarh and Orissa.Company also producing Ferro Alloys which is a raw material used in Steel manufacturing .Spong iron manufacturing division showing good performance in recent times.Its integrated nature helping the company to ensure uninterrupted raw material  availability and high margin. Its strategy to use a major portion of its steel production for converting into high margin end products  like TMT and wire rods are paying off. For the quarter ended December 2011, Prakash posted a turnover of Rs.520 Cr and a  net profit of Rs.66 Cr . At CMP of Rs.61 it is trading at a P/E of just 3 on the expected FY 13 EPS of Rs.20+ which is cheapest among the integrated steel producers.The main risk factor is the allegation related with coal mining by the company in Chhattisgarh. Risk takers can BUY for medium to long term at CMP of Rs.61


  1. Dear VPji,

    What happened to Alchemist Ltd in December 2011?
    What is your stand on this? Will it worthy to be considered? Could you please throw some light on the operational side, Financial side and management side of this company?
    Awaiting your valuable inputs.

    Neeraj Sharma

  2. Dear Neeraj Sharma

    Alchemist is a mysterious company,difficult to believe many of their claims and management is not interest to answer for any queries.Not enough confidence to recommend but chances of price rigging can't be ruled out.

  3. Dear Sir,

    I was a new investor a year back. I invested in couple of stocks you recommended in the past and made good returns. I want to book profits. Do I need to pay capital gains tax on each stock or the overall portfolio and where and how to pay the capital gains tax.

    Please explain.

    Nivedita Naidu

  4. Dear Nivedita Naidu

    No capital gain is applicable if the shares are purchased one year back.

  5. Dear Sir,
    What is your present view on Fortis healthcare(India) Ltd ?
    Is it a worth buy for medium/ long term investors?


  6. Dear sir,

    Tata coffee alliance with starbucks. how do you see tata coffee for long term?

  7. Dear VP,

    Please keep up your great work.
    You have successfully lead so many people in making good investment decisons.




  8. ur reccomendation of prakash industries does not mention about the coal missappropriation case which made head lines last year as also the high leveraging which post FCCBcan be a difficult spot to be inT

  9. Dear Chockalingham

    No change in my earlier views on Fortis , for long term

  10. Dear vikram garg

    Some more upside may possible but a major portion is already priced in

  11. Please read till the end ,I have clearly mentioned the case related with coal mining as the major risk factor.Three years are still left for the maturity of FCCB,

  12. Can you please provide your view on PHOTOQUIP India. I was purchase @ 50, now trading around 40. Can I hold for long term ?

  13. What is your view on the upcoming MCX IPO?

  14. Dear Nalajala
    Not tracking Photoequip

  15. Replies
    1. Dear Valuepick,

      I could not understand the logic of recommending MCX. Normally if company require money to expand they go for IPO. In this case this is not happening, some promotors are selling their stake. At any rate they have much better information then us about MCX. Why a promotor should sell their stake, if it is a good stock for long term. Is there any rationale that you have considered?

    2. Dear Sandeep

      What is wrong in taking profit ?.A trade takes place only when there is two sets of people one pessimist and one with optimism.Many Big investors bought shares as Anchor investors , can we say they are fools and the selling people is only wise ? .If that is the logic , what about the public issues of many PSU companies where govt is selling their stakes.?

    3. Dear Valuepick,

      Govt sell their stake to raise money to invest in business that give better return. They require these funds for achieving their Fiscal deficit targets too. I think it was the case of sheer optimism that IPO was subscribed 54x. Do not you think companies can take the advantage of such optimism to sell their stake.
      My point was if one promoter such as financial technologies know much about MCX and its future prospects. Why would they sell their stake, if they know that this is still going to give good return.

  16. Dear VP,

    You mean MCX ipo at lower price band or upper.



  17. Dear jagat

    Cut off means the rate at which company allotting the shares, whatever it may be.In that case practically which is equal to applying at upper price band.

  18. Dear VP,

    Request you to review the below stocks...
    1. ZF Steering Systems
    2. Hikal
    3. Omax Autos
    4. Globus Spirits

    Despite posting excellent results, these stocks have not participated much in this rally.

    1. Dear Jaychand

      Hikal Is good one ,not tracking the rest

  19. Sir, Is it still a buy...(luckily I found this on NSE and its CMP is 57)

  20. Sir, what about Prakash Industries now at CMP of 29.
    Should I accumulate more or sell.

  21. Sir, what about Unitech Ltd,
    should I accumulate more at CMP of 20 or sell.



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