PRAKASH INDUSTRIES LTD - Quantamental Equity Research Report

Quantamental Equity Research on PRAKASH INDUSTRIES LTD | Release: 15 Jan 2019 23:11:23 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:PRAKASH and BSE CODE:506022
Last Close:  INR 96.95
Fair Value:  INR 81.75
Est. Price by Mar 19:  INR 206.7
Market Capitalization (INR Crs):  1583.65
Industry:  Iron & Steel/Interm.Products
Rating:  STRONG BUY
Upside:  113%
Company Profile
Prakash Industries Limited is engaged in the production of ferro alloys, MS TMT/MS Coil and allied products, HB Wire Rod, and PVC Pipe and Sockets.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 35% 17% 23%  
EBIT % 192% 581% 115%  
Earnings % 377% 4035% 134%  
Book Value %  23% 28% 37%  
Stock Total Return %  131% 381% 438%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 39.30  
(B) FII/FPI 6.33  
(C) DII/Insurance Companies 0.23  
(D) Public holding < 2 lakhs of cap. 21.55  
(E) Others 32.59  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 227 89 52 37 67 42 38 87 201 207 258 322 399 488  
Return on Equity 22% 17% 15% 8% 8% 0% 1% 4% 14% 13% 14% 15% 16% 16%  
Price to Earning  10.4 4.5 2.6 3.0 5.2 60.0 22.0 14.9 8.2 8.2 8.2 8.2 8.2 8.2  
EVTI 1.9 1.1 0.8 0.6 0.7 0.6 0.7 1.0 1.3 1.2 1.2 1.2 1.2 1.1  
EVTIFM 10.4 4.5 2.6 3.0 5.2 60.0 22.0 14.9 8.2 8.2 8.2 8.2 8.2 8.2  
Price to Book Value 2.3 0.8 0.4 0.3 0.4 0.3 0.2 0.5 1.2 1.1 1.2 1.2 1.3 1.3  
Debt to Equity  0.2 0.4 0.5 0.5 0.4 0.4 0.4 0.4 0.3 0.6 0.9 1.1 1.2 1.3  
Dividend Yield 0% 1% 2% 3% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0%  
Cash Flow to Firm -1% -27% -14% 6% 7% 6% 9% 2% 2% -13% -9% -5% -2% 2%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales       2,934.81       4,293.48       6,066.48       8,268.32     10,855.90     13,710.48  
EBITDA          598.38          927.10       1,309.95       1,785.39       2,344.13       2,960.52  
EBIT          477.44          750.17       1,061.31       1,448.43       1,904.30       2,408.42  
PBT          388.34          627.46          782.71          976.37       1,210.28       1,482.12  
NPAT          386.25          414.19          516.67          644.50          798.91          978.35  
Price to Earning               8.15              8.15              8.15              8.15              8.15              8.15  
Price to Book Value              1.16              1.08              1.16              1.23              1.28              1.32  
Debt to Equity               0.30              0.60              0.87              1.08              1.22              1.26  
Return on Equity              0.14              0.13              0.14              0.15              0.16              0.16  
Enterprise Value to Total Income (EVTI)              1.34              1.21              1.21              1.19              1.16              1.13  
Enterprise Value to Total Income to Firm Margin(EVTIFM)              8.62            11.09            11.02            10.84            10.59            10.28  
Price or Est. Share Prices          200.70          206.70          257.85          321.65          398.75          488.35  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT          627.46          782.71          976.37       1,210.28       1,482.12  
Interest          122.71          278.60          472.05          694.02          926.30  
Depreciation          176.93          248.63          336.97          439.83          552.10  
Cash Flow Before Tax          927.10       1,309.95       1,785.39       2,344.13       2,960.52  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax          611.98          864.69       1,178.54       1,547.36       1,954.24  
Terminal Cash Flow                                                                                      -       13,448.40  
Total Cash Flow          611.98          864.69       1,178.54       1,547.36     15,402.64  
Present Value of Cash Flow       8,938.57  
Debt       7,603.74  
Value of Equity       1,334.84  
Fair Value Per Share            81.75  
Equity            1,584
Debt               818
Beta Take from Reuters 2.25
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                 89
Tax Benefit                   0
Interest Net of Tax                 89
Debt               818
Cost of Debt 11%
Cost of Equity 24%
Debt Weight 34%
Equity Weight 66%
WACC 19%
Cash Flow of Mar-23 E       1,954.24
Growth 2.0%
Present Value of Terminal Cashflow     13,448.40
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Prakash Inds.             96.95            1,584          190.13            26.07            14.34              0.57              3.55              0.51              2.67              0.30                  -              26.07            25.14            4,117            14.69                 11              7.94            41.30              8.10            39.44          399.83
   2  Godawari Power           248.50               876          296.93            35.90            16.02              0.87              6.59              0.84              2.80              2.30                  -              35.90            35.35            3,221            37.53                 13            11.71            45.03            14.71          294.55          760.50
   3  Ratnamani Metals           920.50            4,301          299.88            27.30            18.46              1.48            17.56              3.07            18.79              0.06              0.65            22.25            17.51            2,964            60.09                 73            19.85          129.93            20.17          158.97          574.93
   4  Sarda Energy           264.15               952          461.32            12.47            13.96              0.86              8.85              0.57              4.96              0.88              1.89            11.37            11.05            2,350            72.50                 22             -5.27              3.98           -11.59           -15.12          721.99
   5  Sunflag Iron             53.05               956            50.14            22.00            19.90              0.50              7.51              1.06              6.17              0.40                  -              22.00            20.06            2,456            49.06                 28              9.92            14.63             -9.23            43.18            98.50
   6  APL Apollo        1,109.00            2,632          368.88            15.33            22.41              0.50            18.89              3.01            17.08              0.93              1.26            12.11            10.75            6,769            37.25               106              0.83            25.65           -43.22           -34.45          736.75

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