Fundamentals

JSW STEEL

Ticker: 500228 BUY: Rs.305.85
Target: Rs.330

JSW Steel is engaged in manufacturing and selling of steel products in India. It has forayed into the global market through the acquisition of Aferpi from Italy and Acero Junction from USA . Post the acquisition in USA , it plans to upgrade Acero steel plant with integrated capacity of 3 million tonnes by investing USD 250 million. Also, in March 2018, it has signed an MoU to expand operations of its plate and pipe mills in Baytown, Texas. These acquisitions would benefit the company as the expansion in the US would help grow the domestic steel industry and increase the realisations . In the domestic market, it has installed new 5 million tonnes capacity flat steel plant in Maharashtra which will lead the total capacity to 1.5 million tonnes. Considering wide expansions and acquisitions, we recommend it as a BUY.




INDRAPRASTHA GAS

Ticker: 532514 BUY: Rs.273.55
Target: Rs.304

The company supplies CNG to the transport sector and PNG to the domestic, industrial and commercial sectors in Delhi and NCR. In Q4FY18, the revenue was up by 23.1 per cent YoY due to higher realisations . The PAT too increased by 37.3 per cent YoY due to higher operating profits. The Delhi government has initiated green budget initiative by granting 50 per cent concession on registrations on CNG cars leading to cleaner fuel. Also, the recent hike in petrol and diesel prices is shifting users' preference towards using CNG for transport. The company has invested in MNGL and CUGL which has given access to gas demand in cities like Pune, Jhansi, Kanpur, Bareilly etc. With growing demand and robust volumes, the company's topline is expected to grow over the next couple of years. Considering these factors, we recommend it as a BUY.