Gujarat Mineral Development Corporation Ltd. (GMDC) is a Gujarat State government undertaking engaged in the business of lignite, bauxite and fluorspar mining as also power generation units based on Lignite.
The company has been posting improved financial performance quarter on quarter of FY 08. For FY 07, the total income was at Rs.610 crores with EBITDA of Rs.310 crores, PBT of Rs.157 crores and PAT of Rs.105 crores, resulting in an EPS of Rs.6.60 (face value Rs.2).
For 9 months ending 31-12-07, the total income of the company was Rs.700 crores with EBITDA of Rs.419 crores, PBT of Rs.270 crores and PAT of Rs.200 crores, giving an EPS of Rs.12.60 for 9 month. Hence, FY 08, is likely to have topline in excess of Rs.1,000 crores with PAT of close to Rs.300 crores, giving an EPS of close to Rs.19 on face value of Rs.2 per share.
The present equity of the company is Rs.31.80 crores with face value of Rs.2 per share. The board of the company proposed 1 : 1 bonus shares in last week of January 08 and share is presently ruling at Rs.308 cum bonus.
This translates into a market capitalization of close to Rs.5,000 crores for the company, which is quite low compared to rich reserves of lignite held at its various mines. Even total borrowing of less than Rs.800 crores is largely for net current assets which makes it virtually a debt free company.
The shareholding pattern of the company as at 31-12-07 is 74% with the promoters being the Govt. of Gujarat, 12% by Mutual Funds, Banks and Financial Institutions and 14% by Public with about 47,000 shareholders.
The company presently producing about 80 lakh MT of lignite at its three mines. New mines have been developed at the various locations at Surat to cater to South Gujarat where estimated annual production would be 10 lakh MT. 10 lakh MT of lignite production at Amod near Bharuch would fully contribute in FY 09. 30 lakh tonne of lignite production is estimated from Bhavnagar mines to cater to Saurashtra region and Central Gujarat. So, in FY 09, the production of lignite shall get increased by about 40%.
The company also has 250 MW power plant in operation based on lignite.
Lignite referred to as Brown Gold, is an alternative for coal which is in great demand, as natural resources are becoming scarce all over the world. FY 09 the company may see a topline of Rs.1,500 with PAT of Rs.600 crores which would result in an EPS of Rs.38, on pre-bonus equity. This results into a PE multiple of just 8 times for the stock, which is very cheap for any mining company.
The share which is now ruling at Rs.308, would go ex-bonus by the end of April at Rs.155. The stock at this rate is quite cheap, which can give a conservative return of close to 50% per annum over the next two years.A safe and excellent bet at Rs.308 levels on cum-bonus basis.
The company has been posting improved financial performance quarter on quarter of FY 08. For FY 07, the total income was at Rs.610 crores with EBITDA of Rs.310 crores, PBT of Rs.157 crores and PAT of Rs.105 crores, resulting in an EPS of Rs.6.60 (face value Rs.2).
For 9 months ending 31-12-07, the total income of the company was Rs.700 crores with EBITDA of Rs.419 crores, PBT of Rs.270 crores and PAT of Rs.200 crores, giving an EPS of Rs.12.60 for 9 month. Hence, FY 08, is likely to have topline in excess of Rs.1,000 crores with PAT of close to Rs.300 crores, giving an EPS of close to Rs.19 on face value of Rs.2 per share.
The present equity of the company is Rs.31.80 crores with face value of Rs.2 per share. The board of the company proposed 1 : 1 bonus shares in last week of January 08 and share is presently ruling at Rs.308 cum bonus.
This translates into a market capitalization of close to Rs.5,000 crores for the company, which is quite low compared to rich reserves of lignite held at its various mines. Even total borrowing of less than Rs.800 crores is largely for net current assets which makes it virtually a debt free company.
The shareholding pattern of the company as at 31-12-07 is 74% with the promoters being the Govt. of Gujarat, 12% by Mutual Funds, Banks and Financial Institutions and 14% by Public with about 47,000 shareholders.
The company presently producing about 80 lakh MT of lignite at its three mines. New mines have been developed at the various locations at Surat to cater to South Gujarat where estimated annual production would be 10 lakh MT. 10 lakh MT of lignite production at Amod near Bharuch would fully contribute in FY 09. 30 lakh tonne of lignite production is estimated from Bhavnagar mines to cater to Saurashtra region and Central Gujarat. So, in FY 09, the production of lignite shall get increased by about 40%.
The company also has 250 MW power plant in operation based on lignite.
Lignite referred to as Brown Gold, is an alternative for coal which is in great demand, as natural resources are becoming scarce all over the world. FY 09 the company may see a topline of Rs.1,500 with PAT of Rs.600 crores which would result in an EPS of Rs.38, on pre-bonus equity. This results into a PE multiple of just 8 times for the stock, which is very cheap for any mining company.
The share which is now ruling at Rs.308, would go ex-bonus by the end of April at Rs.155. The stock at this rate is quite cheap, which can give a conservative return of close to 50% per annum over the next two years.A safe and excellent bet at Rs.308 levels on cum-bonus basis.
Source: sptulsian.com
