Prakash Industries gains 4 per cent on mining operations commencement

Prakash Industries has commenced mining operations in its Sirkagutu Iron and Manganese ore mine at Keonjhar, Orissa.

The company has commenced the operations after execution of the Mining Lease and obtaining all statutory clearances.

The extraction of minerals from the mines is expected to pick up in November 2019.

We expect the company's operating margin to improve going forward as the recent extraction of iron ore is expected to bring down costs since iron ore is a major raw material in the steel producing process.

Recently, the company has expanded the installed capacity in its Steel Melting Shop to 1.176 mn tonnes per annum. This would also likely work as a cost rationale.

Today, the stock of Prakash Industries opened at Rs54.70 and made an intraday high of Rs57.15, up by 4 per cent on the BSE. At 14:20, the stock was trading at Rs54.80 on the BSE.