Result Update: Rohit Ferro Tech

The company remains the prime beneficiary of the buoyant ferro alloy cycle due to its enhanced capacity. During the quarter, RFTL acquired a 60% economic interest in two operational coal mines in Indonesia, further strengthening its raw material linkages.

The stock currently trades at a P/E of 3.6x and an EV/EBITDA of 2.6x on FY10E which is extremely attractive considering the strong ferro alloy realizations coupled with volume growth.

We have valued the newly acquired coal mines at ₹ 37 per share on NPV basis, which gives us a revised target price of ₹ 53 from ₹ 16. We reiterate our BUY recommendation on the stock.

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