Prakash Industries Ltd

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: [email protected]

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.

At A Glance

Equity (Rs Cr.) Book Value EPS PE Ratio Market Cap (Rs Cr.) 52 Week High/Low Dividend Yield (%) Last Dividend (%)

115.47 62.06 19.80 8.30 1886.78 355/71 0.00 0.00

Share Holding Pattern (%) as on 31 March 2008

Foreign Institutions Non Promoter Hold Promoters Public & Others Total

12.36 2.75 16.07 54.97 13.85 100.00

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 2HFY10, The stock at the current market price of Rs 163/- trades at 8.23 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. In FY10, assuming the company delivers on mining front, valuation appears to be reasonable.

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 range of products & strong financials with a dream to take it to greater heights. Due credit for all this goes to Mr. V.P. Agarwal. In fact he has been honored with being one of the most innovative industrialists in India. He is also the winner of prestigious UNCIY AWARD for innovating new techniques in hilly area by Honorable President of India. The company coins itself as the “Sunshine Conglomerate” referring to the conscience which is as clear & clean as sunshine.

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.

Aashish Chitlangi Institutional Desk:

[email protected]

+91-9820186491

Rahul Bhandawat Research Desk:

[email protected] +91-9321413828

PIL came out with a public issue in Nov.'91 to part-finance the sponge iron project being set up at Champa, Madhya Pradesh, with an installed capacity of 1.5 lac tpa. It then entered into a technical collaboration with Lurgi, Germany, for the sponge iron project. In 1994-95, the company doubled the capacity of the sponge iron plant from 1.50 lac tpa 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 expansioncum-diversification project. The company successfully commissioned the stainless steel project at Bharuch in 1995-96. PIL is also implementing a 10-MW wind-farm project in Tamil Nadu. 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.

The Management has targeted an EBITDA of Rs. 800 cr. for FY10.

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 utilization of hot gases which was a mile stone for the company on its part to contribute towards harnessing energy from waste resources. 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.

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 management towards the supply of quality products to its customers and its obligation towards the environmental protection responsibility in the interest of its employees and the society. Along with the expansion plans in the steel sector, company has embarked on a new 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%

121.50

111.57

9%

12.09

11.73

3%

1585.59

1172.32

35%

247.45

156.64

58%

PVC Pipes Total

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

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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 •

• 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.

• •

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 tons. Due to declining availability of melting scrap, sponge iron demand has also gone up considerably and is likely to continue. About 45% of the domestic output is through EAF (Electronic Arc Furnace) route. However, going forward this is slated to increase.

Steel Structural: Prakash Industries is presently producing Steel (Steel 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

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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 of that under agriculture

1,200,000

Tones

1,000,000 800,000 600,000 400,000 200,000 0 Sponge Iron

Billets

Wire rods

Ferro Alloys

Structural

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 iron ore mine in Chhattisgarh, which is expected to be operational in next 12-15 months. The mine has total reserves of 75mt

Year 2008 continues to be a great year for the global mining industry. Record commodity prices and continued growth in emerging economies have let the top mining companies avoid the slowdowns that have been hitting other sectors. The market capitalization of the industry grew by 54 per cent. For the first year since 2002, cash flows from operations were insufficient to cover the increased levels of investment activities. The shareholder returns for the top 40 averaged 119 per cent in 2007, compared to 55 per 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

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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 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.

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 Wealth Creator Thru Systematic Investment

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Reporting….Prakash Industries Ltd.

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.

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.

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’

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

Wealth Creator Thru Systematic Investment

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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.

Net Sales

Prakash Industries 1253.56

1161.67

Other Income

Jindal Steel & Power Ltd. 5410.75

26.72

3.71

49.12

Operating Profit

275.38

301.47

2180.51

Profit after Tax

173.68

211.87

1236.96

0.00

-10.10

0.00

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

229.05

62.06

240.78

4.50

0.00

3.60

2562.72

1679.51

32023.67

Extraordinary Items Net Profit

Book Value Dividend (Rs.) Market Cap PBIDTM (%)

23.71

23.00

40.30

PBDTM (%)

23.09

19.69

36.11

PATM (%)

14.95

15.85

22.86

64%

100%

155%

Yearly Stock Returns (%)

Î Latest Results Quarterly Results (Rs in Cr.) Quarter Ended Particulars

Jun-08

Jun-07

392.07 1.59

PBIDT

87.43

Interest

10.29

PBDT

77.14

Sales Other Income

Mar-08

Mar-07

%Var

273.06

43.60

1253.72

931.87

34.50

0.16

893.80

3.77

26.82

-85.90

65.88

32.70

288.30

224.42

28.50

4.08

152.20

41.46

25.75

61.00

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

66.88

50.12

33.40

198.72

132.79

49.60

PAT

Wealth Creator Thru Systematic Investment

Year Ended

%Var

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Reporting….Prakash Industries Ltd. Capital Employed (Segments):

Segment Revenues: Segment Revenue

900 800 700 600 500 400 300 200 100 0

1400

840.61

1295.46

1200

663.33

933.19

1000 R s Cr .

Rs. Cr.

Capital Em ployed

188.93 138.7

Power

Steel

600 400

88.78

93.09

200

168.63 127.55 117.79

Power

Steel

PVC Pipes

Segments 2008

2007

Profit Contribution from Segments:

2007

2006

Ratios:

Profit Contribution PVC Pipes, 8%

121.5 72.97 64.56

0

PVC Pipes

Segm ents 2008

789.13

800

Ratios as per Audited Balance Sheet ended 31st Mar 2007 Power, 41%

Steel, 51%

Return on net worth (RONW) %

29.45

Return on capital employed (ROCE) % Cash profit margin %

16.45 15.24

Current Ratio %

6.52

Debt Equity Ratio %

1.41

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 30-06-08

1st Qtr 30-06-07

392.07

273.06

1.59

0.16

PBIDT

87.43

65.88

Interest

10.29

PBDT

77.14

Depreciation

10.16

Tax Profit After Tax

Net Sales Other Income

VAR [%]

VAR [%]

4th Qtr 31-03-08

4th Qtr 31-03-07

43.60

358.69

277.49

893.80

1.84

25.40

32.70

79.30

76.94

3.10

4.08

152.20

25.08

9.95

152.10

61.80

24.80

54.22

66.99

-19.10

11.56

-12.10

12.49

11.54

8.20

66.98

50.24

33.30

0.00

0.00

66.88

50.12

33.40

41.56

35.82

VAR [%]

3rd Qtr 31-12-07

3rd Qtr 31-12-06

29.30

329.13

257.36

-92.80

1.29

0.30

78.60

55.52

41.60

11.33

6.09

86.00

67.27

49.43

36.10

11.73

11.53

1.70

0.00

0.00

0.00

16.00

55.46

37.76

VAR [%]

2nd Qtr 30-09-07

2nd Qtr 30-09-06

27.90

292.68

211.39

38.50

330.00

0.42

0.80

-47.50

67.59

47.67

41.80

1.04

4.82

-78.40

66.55

42.85

55.30

11.82

11.44

3.30

0.00

0.00

0.00

0.00

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

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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: [email protected]

-: CORPORATE OFFICE :Kailash Sarda Mahesh Hostel Complex, Opp Bombay Motors, Chopasni Road, Jodhpur – 342003 Tel: +91-291-2654000 Fax: +91-291-2430913 Email: [email protected]

-: INSTITUTIONAL SALES :Aashish Chitlangi 9, Parekh Vora Chambers, 66 N.M.Road, Fort, Mumbai – 400023. Tel: +91-22-22666178, 22691103 Fax: +91-22-66344007 Email: [email protected] For details visit our website at www.srspl.com

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