Wealth Creator Thru Systematic Investment

Suresh Rathi
R E P O RT 0 8 0 9 / 0 0 9
1 S T A U GU S T 2 0 0 8

Reporting-

Prakash Industries Ltd.

The Sunrise Conglomerate...

9, Parekh Vora Chambers

66 N.M. Road, Fort
Mumbai - 400023

Phone: +91-22-22666178
Fax: +91-22-66344007
E-mail: rahulb@srspl.com
Suresh Rathi
 SURESH RATHI SECURITIES PVT LTD.
 
Research Report No 0809/009 1st August 2008

PRAKASH INDUSTRIES LTD.

CMP: Rs. 163/-

Î The next “Jindal Steel & Power in making…”

PIL is one of the leading steel makers of India. Besides steel, the company also
manufactures Worsted Yarn, PVC pipes, B&W TV picture tubes, video tapes and
cassettes & is entering Power Generation in a big way. It has ample expertise in these
fields. Also, the company’s diversification into mining, power, textiles and Cement arena
is expected to increase future earnings visibility. Prakash Industries Ltd (PIL) reported
1QFY08 results: Net sales of Rs 392 Cr. (Q-on-Q up 43.6%). PAT up by 33.4% on a
sequential basis. The increase was primarily on account of increase in other income &
Sales. However, with spiraling interest rates, its interest cost burden increased by
152.2% to Rs. 10.29 cr. from the consecutive quarter.

PIL has been allocated an iron ore mine in Chhattisgarh, which it expects to be
operational in 12-15 months. The company plans to set up 1,000 MW Independent
Power Plant (IPP) in 2 phases and is planning to increase steel capacity from 0.5mtpa to
1mtpa by Mar. ’10 in modular fashion. PIL has a total debt of Rs 3510 cr. with cash
balance of Rs 700 cr. as on 31st Mar 2008. The management has targeted an EBITDA of
Rs. 800 cr. for FY10. As per the guidance, which includes operation of iron ore mine from
At A Glance
Equity (Rs Cr.) 115.47 2HFY10, The stock at the current market price of Rs 163/- trades at 8.23 times to it’s
Book Value 62.06 earning per share of Rs 19.80 and 2.62 times to its book value of Rs 62.06. The stock
EPS 19.80 looks attractive at the current valuation with the strong upside potential in the long term
PE Ratio 8.30 investment horizon. In FY10, assuming the company delivers on mining front, valuation
Market Cap (Rs Cr.) 1886.78 appears to be reasonable.
52 Week High/Low 355/71
Dividend Yield (%) 0.00
Last Dividend (%) 0.00 Î Company History
Prakash Industries Ltd, (PIL) part of ‘Surya Roshni’ group was started in 1980 by Mr.
B.D. Agarwal, Founder Chairman of the company. Mr. V.P. Agarwal, the current
Chairman & Managing Director of the company is a true visionary who has led the
company to new heights. PIL has achieved a rapid growth in recent years due to its wide
Share Holding Pattern (%) range of products & strong financials with a dream to take it to greater heights. Due
as on 31 March 2008 credit for all this goes to Mr. V.P. Agarwal. In fact he has been honored with being one
Foreign 12.36 of the most innovative industrialists in India. He is also the winner of prestigious UNCIY
Institutions 2.75 AWARD for innovating new techniques in hilly area by Honorable President of India. The
Non Promoter Hold 16.07 company coins itself as the “Sunshine Conglomerate” referring to the conscience which is
Promoters 54.97
as clear & clean as sunshine.
Public & Others 13.85
Total 100.00
Î Business Overview
PIL is one of the leading steel makers of India. Besides steel the company also
manufactures Worsted Yarn, Wind Mills, PVC pipes, B&W TV picture tubes and video
tapes and cassettes. Its plants are located throughout India in states of Chhattisgarh,
Silvassa, Uttaranchal, Tamil Nadu, Uttar Pradesh, Madhya Pradesh, Punjab and Orissa.

PIL came out with a public issue in Nov.'91 to part-finance the sponge iron project being
Aashish Chitlangi set up at Champa, Madhya Pradesh, with an installed capacity of 1.5 lac tpa. It then
Institutional Desk: entered into a technical collaboration with Lurgi, Germany, for the sponge iron project.
inst@srspl.com In 1994-95, the company doubled the capacity of the sponge iron plant from 1.50 lac tpa
+91-9820186491 to 3.30 lac tpa and also undertook a forward integration project to set up a stainless
steel plant in Gujarat together with a rolling mill and a worsted woolen yarn EOU at
Silvassa. It came out with a rights issue in Jan.'96 to part-finance the above expansion-
Rahul Bhandawat cum-diversification project. The company successfully commissioned the stainless steel
Research Desk:
project at Bharuch in 1995-96. PIL is also implementing a 10-MW wind-farm project in
rahulb@srspl.com Tamil Nadu.
+91-9321413828
The integrated steel plant of the company is located at Champa, in Chhattisgarh. The
company has setup Rotary Kilns based on SL/RN technology of Lurgi, Germany
 Reporting….Prakash Industries Ltd.

Recognizing the potential to tap the waste gases let out by the Sponge Iron kiln, the
company also installed a power Co generation plant with Waste Heat Recovery Boilers in
collaboration with Lurgi ,Germany. It installed its first Boiler in the country based on
The Management has utilization of hot gases which was a mile stone for the company on its part to contribute
targeted an EBITDA of Rs. towards harnessing energy from waste resources.
800 cr. for FY10.
The company understanding the importance of in-house power generation and value
addition through Steel making and further manufacturing of rolled products in the Rolling
Mill is undertaking the necessary steps for full backward and forward integration. Thus to
ensure the uninterrupted supply of consistent quality of Iron ore for the Sponge Iron
Kilns, company has set up a Crushing and Screening plant at Koira, Distt- Sundargarh in
the state of Orissa & Rolling Mill facilities at Raipur, Chhattisgarh to manufacture steel
structural. The company has also installed latest technology of ‘submerged arc furnaces’
to produce high quality Ferro Alloys to meet its in house requirements and also to cater
export as well as domestic market for supply of high quality Ferro Alloys.

The company has been certified for ISO 9001:2000 in Quality management system and
ISO-14001 in Environment Management System which shows the commitment of the
The company has been
management towards the supply of quality products to its customers and its obligation
certified for ISO 9001:2000
towards the environmental protection responsibility in the interest of its employees and
in Quality management
the society.
system and ISO-14001 in
Environment Management
Along with the expansion plans in the steel sector, company has embarked on a new
System.
thrust area of Power Generation. It is in process of installing independent power plants
based on varied utilization of low grade fuel bringing latest technology to the fore.
Company’s mission is to achieve the overall growth of the company through high
productivity, continuous improvement and technological break-through and dedicated
efforts towards attainment thereof.

Î Diversified…

Segment Revenue (Rs. Cr.)

Segments Revenue Profit
2008 2007 VAR[%] 2008 2007 VAR[%]
Power 168.63 127.55 32% 104.48 65.06 61%
Steel 1295.46 933.20 39% 130.88 79.85 64%
PVC Pipes 121.50 111.57 9% 12.09 11.73 3%
Total 1585.59 1172.32 35% 247.45 156.64 58%

Î Steel

Steel forming 81% of the total revenue is the main forte of Prakash Industries. It has a
very healthy mix of Steel & Steel related products which it manufacture at its integrated
steel plant located at Champa District in Chhattisgarh.

Sponge Iron: - A substitute for scrap iron & steel. The process of making
Sponge iron involves mixing of iron ore with pulverized coal or natural gas and coke &
feeding it to a large rotary kiln. The kiln is then heated to 1,800°F, the powdered coal
first robs the ore (iron oxide) of its oxygen, then turns into gas, leaving fairly pure iron
granules which have a spongy texture. This stuff can then be fed to the steel furnaces.
Sponge Iron has now succeeded in becoming a preferred raw material in secondary steel
making. The rotary kiln discharge is cooled in a rotary cooler connected to the kiln,
screened and subjected to magnetic separation in order to remove the non magnetics
from the sponge iron. The issue of green house gas emissions is of growing importance
in the world. However, steel plants are striving to improve their competitiveness and are
adopting new measures to improve efficiencies & quality to meet the new environmental
standards.

Wealth Creator Thru Systematic Investment -2-

 Reporting….Prakash Industries Ltd.

India is the largest producer
of Sponge Iron in the world
with a production capacity of
13.9 million tons.
PIL’s - Sponge Iron unit has a total 4 Lac MTA capacity. It has two Rotary Kilns based on
SL/RN technology of Lurgi, Germany. This technology is coal based and the waste gases
of the Rotary Kilns are utilized for generation of power in Power Cogeneration plant. The
whole process of manufacturing Sponge iron (DRI) is environment friendly with provision
of pollution control equipments at all the required stages along with the concept of 100%
reutilization of the waste water. Sponge iron produced at PIL is distinct due to its high
metallic iron content and uniform & consistent quality.

Global Scenario

• The total global production of sponge iron was estimated to be about 49.45
million tons in the year 2004.
• India, Venezuela, Iran and Mexico are the four largest producers of sponge iron
with about 16%, 14%, 11% and 11% share of world's total production.
• Sponge iron is increasing being used in steel making because of lower availability
of scrap in the international market and increased use of Electric Arc Furnace in
steel making.

Indian Scenario

• With the domestic steel industry picking up during the past 2-3 years and prices
moving up northward, India has emerged as the world's largest producer of
sponge iron (or direct reduced iron), accounting for around 16 per cent of the
global output.
• India is the largest producer of Sponge Iron in the world with a production
capacity of 13.9 million tons (Year 2006), followed by Venezuela with 6.2 million
Bowing to Govt. demand, the tons.
consortium of steel
• Due to declining availability of melting scrap, sponge iron demand has also gone
producers had put a
up considerably and is likely to continue.
temporary freeze on the
prices of steel till August, but • About 45% of the domestic output is through EAF (Electronic Arc Furnace) route.
with the increase in However, going forward this is slated to increase.
international prices of steel
we expect an upward
revision in prices in 1st or 2nd Steel Structural: Prakash Industries is presently producing Steel (Steel
week of August. Blooms/Billets/Ingots) through Induction Furnace route. Company also produces
Steel Structural, manufactured in the Hot Rolling Mill of 150000 TPA capacity at Raipur
plant. Company is one of the leading manufacturers of high quality Structural steel
comprising of Beams, Channels, and Angles etc used in diversified applications. Company
has planned installation of two more Kilns of 2 LTPA capacity each at Champa,
Chhattisgarh thus doubling its total capacity of Sponge Iron division to 8 LTPA.

Wire Rods / HB Wire: In furtherance of the objective of value addition by forward

integration and to utilize the in-house produced Billets, company has set up a 180000
TPA capacity modern technology Wire Rod mill at Raipur Rolling mill division for
manufacturing MS Wire Rods of 5.5 mm diameter and wire drawing facility of 60000 TPA
to manufacture HB wire of sizes 8, 10 and 12 Gauges. These products will be used for
various applications including GI wire, Barbed wire for fencing, armored sealed wire for
heavy electrical cables, Nut bolts, Nails, screws, Alpins, Wire ropes etc.

Projections: Steel is today considered as the backbone of India economy. The

growth of economy has a direct relation with the demand of steel. With the present steel
intensity index, considering the GDP projection by the Govt. of India, growth of steel
demand will be around 11% annually. PIL is a considerably a big player & is bound to
contribute to this figure with its present expansion plans & its efficient management
processes. Bowing to Govt. demand, the consortium of steel producers had put a
temporary freeze on the prices of steel till August, but with the increase in international
prices of steel we expect an upward revision in prices in 1st or 2nd week of August.

Wealth Creator Thru Systematic Investment -3-

 Reporting….Prakash Industries Ltd.

PIL enjoys good operating profit margin currently & is on solid ground in this segment,
as a quality steel structural producer. Company’s products will be in demand & Indian
growth story continues… Given below is the expected segmental production by PIL in
2010.
Capacity
The total area under mining
in India is equivalent to 1/3 1,200,000
of that under agriculture
1,000,000
800,000

Tones
600,000
400,000
200,000
0
Sponge Billets Wire rods Ferro Structural
Iron Alloys
Products

Existing Mar'10

Î Mining & Crushing

Overview: India, one of the world's fastest-growing economies after China,
aims to more than double its current ore mining capacity & take it to 124 million tones by
2012. The nation holds 25 billion tonne of ore reserves. India is an Iron ore producing
country with a huge reserve of iron ore exceeding in 10.5 billion tons. The world has
witnessed a phenomenal growth in mineral trade. As in the case of other developing
countries, the export of minerals from India constitutes one of the principal items of
export.

PIL has been allocated an Year 2008 continues to be a great year for the global mining industry. Record commodity
iron ore mine in prices and continued growth in emerging economies have let the top mining companies
Chhattisgarh, which is avoid the slowdowns that have been hitting other sectors. The market capitalization of
expected to be operational in the industry grew by 54 per cent. For the first year since 2002, cash flows from
next 12-15 months. The operations were insufficient to cover the increased levels of investment activities. The
mine has total reserves of shareholder returns for the top 40 averaged 119 per cent in 2007, compared to 55 per
75mt cent in 2006. Indian companies have fared well in keeping costs within reasonable
control. Analysis of Indian mining majors shows low exploration expenses. But Indian
companies showed lag in disclosures of reserves and resources as it is not mandated by
local regulations. This somewhat depressed their market valuations. The performance of
Indian companies shows continued growth, bucking global trend. Mining companies are
well placed to exploit the growth in certain regions, particularly companies with iron ore
and coking coal assets. Domestic mining companies have been hunting for acquisitions in
Asia, Africa and in Latin America. This trend is likely to continue, given expectations of
supply limitations. However there is tough competition from the Chinese and other
emerging market companies.

Iron ore mines: Moving towards self reliance, Prakash Industries has setup its
own mining and crushing division in District Sundargarh of Orissa, a state rich in Iron Ore
reserves to ensure uninterrupted supply of quality raw materials to its integrated steel
plant at Champa, as a part of backward integration policy of the company. Company has
been allotted Iron ore mines by the state Govt (Nergaon and Metabodali mines in
Chhattisgarh and Sirkagutu mines in Orissa). Other than this, company have applied for
other Iron Ore Lease areas in the state of Chhattisgarh, Orissa and Jharkhand, which is
in advanced stage of processing with respective state Government. To fulfill requirement
of Iron Ore, company has also signed MOU with Chhattisgarh for Iron Ore Mines of 1

Wealth Creator Thru Systematic Investment -4-


PIL is planning to increase
steel capacity from 0.55mtpa
to 1mtpa and captive power
generation capacity from
90MW to 190MW by Mar. ’10
The company expects a
capex of Rs 5500 cr. for its
expansion plans (excluding
capex for mines), which will
be entirely funded through
internal accruals.
Wealth Creator Thru Systematic Investment
Reporting….Prakash Industries Ltd.
MTPA capacity with crushing plant at mine.
Coal Mines: Company has been allotted two captive coal blocks (Chotia and
Madanpur) in Hasdeo-Arand coal fields by the Central Govt. in the state of Chhattisgarh.
Chotia coal field has already been started mining operations with latest technology
equipments with highest automation levels. High grade coal extracted from this mine is
being used for Sponge Iron manufacturing as well as power generation at Champa plant.
PIL also manufactures substantial quantities of high quality Silico Manganese with
Manganese content of 65% at its integrated steel plant at Champa in the state of
Chhattisgarh for meeting required of exports.
Exports: Prakash Industries (PIL) is today one of the leading exporter of Iron
ore fines from India. Company operates from Haldia port in East India, which is
geologically closest in proximity to Chinese ports & has a 3000 Sq.mtrs. plot inside the
Dock complex, just few hundred meters from the main jetty. Another plot at Paradip/
Vizag port is also being planned to suit their increased export potential. It has a strong
liaison network for fast railway movement of fines to the port & is very successful in
planning these very essential details for a precise & economical export path.
Î Power Generation
Ever increasing demand… Broadening supply gap… India has still to go a long way in
becoming self sufficient in Power. Power is a critical infrastructure necessity for overall
economic development and for improving the quality of life. The achievement of
increasing installed power capacity from 1362 MW to over 100,000 MW since
independence and electrification of more than 500,000 villages and towns are impressive
in absolute terms. Still looking at our population & on account of inadequate generation
capacity, the country is plagued by power shortages. The total energy shortage, during
2004-2005, was 43,258 million units, amounting to 7.3 % and the peak shortage was
11.7% per cent of peak demand. With increasing urbanization, industrial growth and per
capita consumption, the gap between the actual demand and supply is likely to increase.
In this scenario, the GOI expects that alternative/renewable sources of energy, such as
wind energy, biomass energy and energy generated through waste heat recovery
process are likely to play an increasingly important role in bridging the demand supply
gap and conservation of fossil fuels. Huge expenditure from within the country &
overseas is being planned in this area. Our country is potentially, one of the largest
power markets in the world. Power for All – will be India’s motto to achieved by 2012.
Per capita Consumption (Kgoe)
India 531
OECD 4732
World Average 1767
USA 7913
China 1242
South Korea 4431
Japan 4476
0 2000 4000 6000 8000 10000
Co-generation of Power: Prakash Industries is presently generating power
using the waste hot gases generated from the Rotary Kilns and also by using coal fines,
washery rejects, char (A byproduct of Sponge Iron Kilns) in the Fluidized Bed Boilers
(FBB) which is used for captive consumption in the plant. Prakash Industries is the first in
the country using the concept of power Co-generation to utilize the sensible heat of the
flue gases. This concept is the result of the company’s commitment towards the
harnessing energy by using waste resources and by innovative and creative ideas. The
-5-

PIL is planning to set up
1,000MW IPP in two phases
at an estimated capex of Rs.
350 cr. Phase-I of 700MW to
be operational by Sep. ’11
and phase-II of 300MW by
Mar. ’12. Expects to generate
power at a total cost of
Rs1.5/unit.
PVC Pipe division of PIL has
already captured a majority
market share with its
excellent & strong dealer
and distributor network
through out India and it also
has a popular & established
brand ‘PRAKASH’
Wealth Creator Thru Systematic Investment
Reporting….Prakash Industries Ltd.
power generation capabilities are high and economical such that a company which was
primarily producing sponge iron and steel, can now also become a major producer of
power and add ‘POWER’ to its name.
Company has decided installation of two more high efficiency Waste Heat Recovery
Boilers and turbines along with the proposed Rotary Kilns and another Independent
power plant (IPP) based on AFBC/CFBC boiler technology.
Power generation through wind energy: Power generation from wind has
emerged as one of the most rapidly growing renewable energy technologies. The
estimated power generation capacity in India through wind is about 45,000 MW. The
installed capacity was about 1,870 MW in 2004, which is about 4% of the total estimated
potential. Globally, wind generation capacity has increased by 27% in the year 2002 and
is expected to expand 15 – fold in the next 20 years. Wind energy technologies have
matured and large capacity wind turbines in the range of 1.25 to 1.65 MW are now being
manufactured in India. Ministry of Non-conventional Energy Services (MNES), has
formulated a series of policy incentives and fiscal incentives that have been successful in
the development of the wind power sector. On top of this policy, individual state
governments have declared supplementary incentives. This total package of incentives
has created an attractive investment climate, which has spawned a surge of investment
in the sector.
Since conventional fuel, such as petroleum, coal & gas are depleting day by day, Prakash
Industries has also opted for the unconventional method of power generation i.e.
generation of energy from Wind as a step towards conservation of natural resources of
the country. Wind Energy conversion is also a proven technology and has reached a level
of sophistication and atomization. Prakash Industries has set up Wind Power Generating
Farms with 6 MW power generating capacity, located at Muppandal in the state of
Tamilnadu. Because of the favorable wind conditions, this location is very suitable for
highly efficient operations. The plant and machinery installed is state of the art
technology supplied by one of the leading manufacturers having Danish collaboration.
From the time of launch of the Wind Power Project, PIL has come a long way by having
established itself as an important player in this sector.
Î PVC Pipes
The PVC Pipes Division of the company was started in 1981 to cater to the market
demand for irrigation, sewerages and other purposes. With superior quality and
aggressive market penetration, the division has steadily grown in size over the years.
Today Company enjoys the status of being one of the largest manufacturer and supplier
of PVC pipes in the country. Presently this segment is contributing an excellent role in
company’s top line; this division of the company contributes 8% in the profit.
Some of the advantages PIL holds in this segment are that it has already captured a
majority market share with its excellent & strong dealer and distributor network through
out India and it also has a popular & established brand ‘PRAKASH’, well known in the
Indian market.
The company on the basis of these credentials has been associated for more than 5
years with the World Bank funded time bound irrigation projects. This business is treated
as deemed exports. The company PVC pipes division is located at Kashipur in Uttaranchal
and Rayya in Amritsar, Punjab. The present production capacity is 15000 MTPA.
Î Worsted Yarn & Picture Tube
PIL has diversified further and entered the textile industry with the set up of a 100%
export Oriented Worsted Woolen Yarn Unit of 1835 MTPA capacity at Silvassa, Union
Territory of Dadra & Nagar Haveli to manufacture Pure wool and Poly/Wool ranging from
30 to 100 micron counts. Ample supply of water and electricity is added advantage for
this location. Moreover proximity to Mumbai Port gives an edge to this location, being
-6-
 Reporting….Prakash Industries Ltd.

import and export based unit. It uses State Art of Technology with the latest imported
machineries procured from international suppliers.

Picture Tubes Division was setup in the 1986. The company today is a market leader in
Black & White picture tubes industry. The list of major clients of the company’s picture
tubes includes almost all leading Television manufacturers of the country. These
companies use Prakash Picture Tubes for not only their domestic markets but also for
exports of their Televisions. PIL is the first company in the Black & White picture tube
category to be awarded ISO-9002 Certification.

Î Peer Comparison
PIL having presence in PVC Pipes, Yarn & Picture Tube market, its main revenue earner
is its Sponge Iron Divn (Steel), which contributes 81% of its sales. Thus we have
considered Monnet Ispat Industries & Jindal Steel & Power Ltd. as peer competitors of
Prakash Industries. Below is a comparative chart of the same.

Period Ending 31-03-2008 (Crores)

Description Monnet Ispat Ltd. Prakash Jindal Steel &
Industries Power Ltd.
Net Sales 1161.67 1253.56 5410.75
Other Income 26.72 3.71 49.12
Operating Profit 275.38 301.47 2180.51
Profit after Tax 173.68 211.87 1236.96
Extraordinary Items 0.00 -10.10 0.00
Net Profit 173.68 201.77 1236.96
Equity Capital 47.99 115.47 15.40
Basic And Diluted EPS 44.55 18.22 78.20
Operating Profit Margin (%) 23.71 24.05 40.30
Net Profit Margin (%) 14.95 16.10 22.86
Cash EPS 45.39 21.60 109.64
Percent of Shares-Public (%) 60.71 47.40 41.14
Book Value 229.05 62.06 240.78
Dividend (Rs.) 4.50 0.00 3.60
Market Cap 2562.72 1679.51 32023.67
PBIDTM (%) 23.71 23.00 40.30
PBDTM (%) 23.09 19.69 36.11
PATM (%) 14.95 15.85 22.86
Yearly Stock Returns (%) 64% 100% 155%

Î Latest Results

Quarterly Results (Rs in Cr.)

Quarter Ended Year Ended
Particulars Jun-08 Jun-07 %Var Mar-08 Mar-07 %Var
Sales 392.07 273.06 43.60 1253.72 931.87 34.50
Other Income 1.59 0.16 893.80 3.77 26.82 -85.90
PBIDT 87.43 65.88 32.70 288.30 224.42 28.50
Interest 10.29 4.08 152.20 41.46 25.75 61.00
PBDT 77.14 61.80 24.80 246.84 198.67 24.20
Depreciation 10.16 11.56 -12.10 47.68 45.91 3.90
PBT 66.98 50.24 33.30 199.16 152.76 30.40
Tax 0.10 0.12 -16.70 0.44 0.44 0.00
Deferred Tax 0.00 0.00 - 0.00 19.53 -100.00
PAT 66.88 50.12 33.40 198.72 132.79 49.60

Wealth Creator Thru Systematic Investment -7-

 Reporting….Prakash Industries Ltd.

Capital Employed (Segments): Segment Revenues:

Capital Em ployed Segment Revenue

1400
900 840.61 1295.46
800 1200
663.33
700 933.19
1000
600
789.13
Rs. Cr.

800

R s Cr .
500
400
600
300
188.93 138.7 168.63
200 88.78 400
93.09 127.55
100 117.79 121.5 72.97
200
0 64.56
Power Steel PVC Pipes 0
Power Steel PVC Pipes
Segm ents
Segments

2008 2007 2008 2007 2006

Profit Contribution from Segments: Ratios:

Profit Contribution Ratios as per Audited Balance Sheet

ended 31st Mar 2007
PVC Pipes, Return on net worth (RONW) % 29.45
8% Return on capital employed (ROCE) % 16.45
Power, Cash profit margin % 15.24
41%
Current Ratio % 6.52
Debt Equity Ratio % 1.41
Steel, 51% Interest Cover % 5.98
Long Term Debt-Equity Ratio % 1.37
APATM % 10.87

Quarterly -Results at a Glance:

Trailing Quarters (Rs. In Crores)

Particular 1st Qtr 1st Qtr VAR 4th Qtr 4th Qtr VAR 3rd Qtr 3rd Qtr VAR 2nd Qtr 2nd Qtr VAR
30-06-08 30-06-07 [%] 31-03-08 31-03-07 [%] 31-12-07 31-12-06 [%] 30-09-07 30-09-06 [%]

Net Sales 392.07 273.06 43.60 358.69 277.49 29.30 329.13 257.36 27.90 292.68 211.39 38.50
Other Income 1.59 0.16 893.80 1.84 25.40 -92.80 1.29 0.30 330.00 0.42 0.80 -47.50
PBIDT 87.43 65.88 32.70 79.30 76.94 3.10 78.60 55.52 41.60 67.59 47.67 41.80
Interest 10.29 4.08 152.20 25.08 9.95 152.10 11.33 6.09 86.00 1.04 4.82 -78.40
PBDT 77.14 61.80 24.80 54.22 66.99 -19.10 67.27 49.43 36.10 66.55 42.85 55.30
Depreciation 10.16 11.56 -12.10 12.49 11.54 8.20 11.73 11.53 1.70 11.82 11.44 3.30
Tax 66.98 50.24 33.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Profit After Tax 66.88 50.12 33.40 41.56 35.82 16.00 55.46 37.76 46.90 54.63 31.34 74.30

Î Synopsis:

PIL…. A Jindal Steel & Power in the making…. It has become a truly diversified company with interests in Steel, Power, Mining,
Worsted Yarn, Wind Mills, PVC pipes, B&W TV picture tubes and video tapes and cassettes. It is one of the leading steel makers
of India. The company’s diversification strategy is expected to increase future earnings visibility. The stock at the current
market price of Rs 163/- trades at 8.3 times to it’s earning per share of Rs 19.80 and 2.62 times to its book value of Rs 62.06.
The stock looks attractive at the current valuation with the strong upside potential in the long term investment horizon.

Wealth Creator Thru Systematic Investment -8-

 Reporting….Prakash Industries Ltd.

KEY LOCATIONS

-: REGISTERED OFFICE :-
Lalit Mundra
11 & 12 ‘A’ Mithila C.H.S. J.B.Nagar, Andheri (E), Mumbai – 400059.
Tel: +91-22-28354000, 28216446 Fax: +91-22-28205533
Email: mumbai@srspl.com

-: CORPORATE OFFICE :-
Kailash Sarda
Mahesh Hostel Complex, Opp Bombay Motors,
Chopasni Road, Jodhpur – 342003
Tel: +91-291-2654000 Fax: +91-291-2430913
Email: jodhpur@srspl.com

-: INSTITUTIONAL SALES :-
Aashish Chitlangi
9, Parekh Vora Chambers, 66 N.M.Road, Fort, Mumbai – 400023.
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