India infoline says Adhunik Metaliks Ltd: BUY, Target price Rs244

Adhunik Metaliks Ltd

CMP Rs169, BUY

Target price Rs244, Upside 44.1%

ä OMML acquisition, a shot in the arm

ä Steel business revenue to witness 33.5% CAGR over FY07-10E

ä Captive resources to ease margin pressures

ä Power subsidiary valued at Rs35 per share

Valuations compelling

We have valued AML based on the sum-of-parts method, which is primarily based on EV/EBITDA multiple for its steel and mining business and DCF for its power business. Based on the 4.5x FY10E EV/EBITDA for the steel and mining business of Rs6.8bn, we arrived at a fair value of Rs209 per share. We recommend BUY with a SOTP target price of Rs244 per share, implying an upside of 44.1%.

Click below for the Company Report on Adhunik Metaliks Ltd.

http://www.indiainfoline.com/Adhunik_Metaliks_Ltd.pdf

Warm Regards,

India Infoline Research Team

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