M Cap: Rs 1,744cr
The stock price of the integrated steel producer and power operator has seen a sharp jump amid average delivery volumes in the past one month. The buzz around the stock is based on the company’s proposed capital issuance plans. Prakash Industries plans to raise nearly Rs 500 crore by September-end and has indicated that FCCB might be the preferred route. The proceeds are likely to be utilised for the expansion on the power side of the company. The management has estimated that the increase in finishing capacity in the wire rods business plant will contribute to the growth of the company significantly. The company has coal linkages in place for its proposed expansion and it intends to be able to undertake merchant sales of nearly half of its expanded capacity. The management has given a guidance for 30-35 per cent growth in profits for this year. This makes the stock, which is trading at Rs 150, appear cheap at a price-earnings multiple of less than 8 times.
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