Buy Mishra Dhatu Nigam, target price Rs 251: ICICI Securities
Mishra Dhatu Nigam Ltd., incorporated in the year 1973, is a Mid Cap company (having a market cap of Rs 3296.25 Crore) operating in Metals - Ferrous sector.
By ETMarkets.com | Updated:
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ICICI Securities has buy call on Mishra Dhatu Nigam with a target price of Rs 251. The current market price of Mishra Dhatu Nigam is Rs 177.4. Time period given by analyst is one year when Mishra Dhatu Nigam Ltd. price can reach defined target.
Mishra Dhatu Nigam Ltd., incorporated in the year 1973, is a Mid Cap company (having a market cap of Rs 3296.25 Crore) operating in Metals - Ferrous sector.
Mishra Dhatu Nigam Ltd. key Products/Revenue Segments include Steel Alloys, Other Operating Revenue and Sale of services for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 239.54 Crore, up 26.06 % from last quarter Total Income of Rs 190.02 Crore and up 23.14 % from last year same quarter Total Income of Rs 194.53 Crore. Company reported net profit after tax of Rs 42.88 Crore in latest quarter.
Investment Rationale
Mishra Dhatu Nigam’s (Midhani) management highlighted 9MFY22 Value of production (VoP) growth of 27% YoY. Margins have witnessed pressures from increased RM costs; management expects 2-3% margin moderation. Plate mill and the armour facility at Rohtak is commissioned and expected to contribute Rs3bn to order inflow/execution in FY23E, albeit at lower margins as significant part of the orders is now being won through competitive bidding. Margin tailwinds are i) significantly lower other expenses and higher capacity unlocking as in-house rolling commences, ii) rampup in super specialty alloys as 8te VIM is getting commissioned and iii) better productivity and efficiency. Management has guided for 15% revenue growth in FY22E and 15-20% revenue growth in FY23E. The brokerage maintains BUY with a revised target price of Rs251/share.
Promoter/FII Holdings
Promoters held 74 per cent stake in the company as of Dec 21 while FIIs owned 0.2 per cent, DIIs 14.3 per cent.
Mishra Dhatu Nigam Ltd., incorporated in the year 1973, is a Mid Cap company (having a market cap of Rs 3296.25 Crore) operating in Metals - Ferrous sector.
Mishra Dhatu Nigam Ltd. key Products/Revenue Segments include Steel Alloys, Other Operating Revenue and Sale of services for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 239.54 Crore, up 26.06 % from last quarter Total Income of Rs 190.02 Crore and up 23.14 % from last year same quarter Total Income of Rs 194.53 Crore. Company reported net profit after tax of Rs 42.88 Crore in latest quarter.
Investment Rationale
Mishra Dhatu Nigam’s (Midhani) management highlighted 9MFY22 Value of production (VoP) growth of 27% YoY. Margins have witnessed pressures from increased RM costs; management expects 2-3% margin moderation. Plate mill and the armour facility at Rohtak is commissioned and expected to contribute Rs3bn to order inflow/execution in FY23E, albeit at lower margins as significant part of the orders is now being won through competitive bidding. Margin tailwinds are i) significantly lower other expenses and higher capacity unlocking as in-house rolling commences, ii) rampup in super specialty alloys as 8te VIM is getting commissioned and iii) better productivity and efficiency. Management has guided for 15% revenue growth in FY22E and 15-20% revenue growth in FY23E. The brokerage maintains BUY with a revised target price of Rs251/share.
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Promoter/FII Holdings
Promoters held 74 per cent stake in the company as of Dec 21 while FIIs owned 0.2 per cent, DIIs 14.3 per cent.
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