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Monday, November 1, 2010

Potential GOLDMINE : Southern Ispat & Energy Ltd. Bse Code: 531645

Southern Ispat & Energy Ltd. has declared its results for the quarter ended September 2010. Total income came in at Rs 113.24 crore as compared to Rs 32.3 crore, a 251% jump YoY. It reported an 879% jump in net profit of Rs 7.34 crore versus Rs 75 lakh, YoY. In an interview with CNBC-TV18, Vivek Agarwal, CMD, Southern Ispat & Energy gave his perspective on the quarter gone by and the road ahead. I will encourage you to go here to see/read the full interview with the CMD, and understand its impact :

http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=495548

Founded in 1995 as SOUTHERN ISPAT LIMITED by Agarwal Group. The name of the Company was changed to SOUTHERN ISPAT & ENERGY LIMITED with effect from 18th September 2008. SIEL is engaged in the manufacture of Steel Billets based out of Kerala. From its humble beginning 15 years ago as a steel billets manufacturing company, SIEL is diversifying itself in to a chain of businesses in steel sector and is all set to became the only integrated Company manufacturing from iron ore to machine flanges under one roof. They are looking at an acquisition in Gujarat, a steel plant which is into alloy steel flanges. So that will be another move. To cater to all this they are looking for a mine in Chattarpur district which they will be signing in the next week. So the acquisition of the plant in Gujarat and the iron ore both they will be signing in the next week.


This share has seen highs of 48.60 as recently as Jan, 2010. And currently trading at just 11.50 at a very low single digit PE ratio. It's trading at a massive discount to even its current Book Value. From all parameters, this stock is a SCREAMING BUY right now! I will not be surprised if this stock goes on to be the Multi Multi-Bagger of the year 2011. A potential GOLDMINE for sure!

Company website : http://southernispatltd.com/index.html

Cheers!

24 comments:

Deepak Kumar Prasad said...

One more addition to your fan following .

Superstar said...

Hi Deepak, and thanks.

Here is some more info about this GOLDMINE STOCK, Southern Ispat & Energy Ltd. which will help investors take an informed decision on buying this gem:

1. The company has acquired New Tech Forge & Foundry Ltd. (website : http://www.newtechgroup.net/home.html)


2. The company is acquiring iron ore mines in Madhya Pradesh in 150hectres and 230 mt for a cost of Rs.50cr.

3. It has purchased 14MT coal mines for a cost of Rs.35cr in Indonesia.

4. The company has a power plant with an installed capacity of 8MW. It is now going to expand to 100MW in phases.

5. The company is going to expand in a big way with a capex plan of Rs. 300 crores for which it has recently issued GDRs. The company has acquired New Tech Forge for Rs. 95 crores. The company has got shareholders' approval to complete all of its planned expansions for up to Rs.1000cr.

6. 1 crore warrants were issued in May, 2010 to non promoters @ Rs 32 per share (Rs 10 face value + Rs 22 premium) So they perceived the value of the share to be Rs.32 in the near future. It is encouraging for the share price in the future.

7. The company has extended its financial year to 30th June 2010...the AGM would be held in December and before that all the amalgamations and acquisitions will be completed.

Cheers!

Siva said...

After FCS software: Im going to buy your recommendation. I have earned multi fold in FCS software. Now im damn sure im going to get multi multi fold from this stock. currently its circuit filter, if it breaks i wil be the first person to buy huge quantity. God bless you man!!! you are doing great service people like me!!!

Superstar said...

Thanks for your blessings, Siva. God bless you too.

Southern Ispat is in a very fast expansion mode. It is integrating both backwards and forwards, having bought ores in MP, Indonesia and the New Tech Forge & Foundry Ltd. I'm just wondering how long would it take before the company gets into manufacturing Auto Parts? Something very big is happening here.

Cheers!

raj said...

forget about the goldmines...u r the gold mine amongst them[for some like me who is not even remotely related to the market knowledge ,u indeed are a goldmine to me]

p.s. the praise is at a huge discount than your book value ;)

regards
raj

bools said...

Hi Naveen, you are doing good job, first time i am gonna invest based on your idea... i have come across many other share ideas but everywhere u will get, price targets but not the reason, but here you have no price targets but giving fundamentals... keep up your good work....

nikujain123 said...

Hi Superstar,

Have been following your blog off late and quite impressed with your recommenddations. Really appreicta it. With regards to Southern Ispat, what return can one expect. Also can one enter into FCS Software at these levels. This stock is at its all time low, however not sure whether it can barge an up move.

karthikeyan.v said...

Hi Superstar,

One more fan of yours!!!

karthikeyan.v said...

latest analysis of yours ksera,shri lakshmi costyn and southern ispat are good analysis of yours. you are doing reallly a good job, by analysing the company and giving fundamental analysis of the company, its really useful for investor like me to take a decsion.

keep up your good work

VAP said...

Dear Superstar,
I have been following your blog quite regularly. However started investing recently as I started having extra cash of recent.
Can you please advise which sectors I should look out for investment from next 8 to 12 months view.
Thanks,
VAP

Mubeen said...

hai,

your blog is very informative. thanks for that.

please, can you post your view on low shareholding of promotors of this stock.

thanks

amit golchha said...

can southern ispat be accumulated at these level? Rs.11.15

Superstar said...

Hi Raj, bools, nikujain123, Karthikeyan.V, VAP, Amit

Thanks a ton for your very kind words :)

As regards Southern Ispat & Energy, it is CERTAINLY A VERY STRONG BUY AT CURRENT LEVELS. I WILL ACCUMULATE. It has corrected a lot from 13.55 levels due to the Overall Correction in the market. But this is an opportunity to buy & accumulate. It is expected that once the amalgamation (with a Kerala based privately owned company) & acquisition process is complete, the Promoter's stake in the company might go as high as 40%. Whenever that happens, the share price will shoot up. The share is currently near it's bottom and the TARGET CAN BE SKY HIGH. The risk-reward ratio is very much in favor of Reward right now. So one can buy it as much as one can.

Cheers!

VAP said...

Dear Superstar,
Thanks for your response
Can you please advise which sectors or stocsk I should look out for investment from next 8 to 12 months view.
Thanks,
VAP

real value said...

Dear SS
Pl give yr comnt on k sera as stock down contnly . I bought @16.35. I shud think it happend due to markt correction or some bad news. Pl reply

real value said...

Dear SS
K Sera is coming down regularily. this is due to market correction or some thing bad news behind it.
pl give yr comment

amit golchha said...

pls suggest sm large cap share sir. so that when the market goes up we can gain a good profit. i think they r now in zone of low risk and 20% - 30% gain. wts ur view on Tata Moters, SAIL & tata steel.

prashetty said...

sir i saw ur recomendation and brought southern ispat-- i wanted to average it out so waht is the best price to average it out and one more thing -- why is the promoter stake not going do u see any reason

Superstar said...

Hi all. I think my new post about the mind-blowing audited results posted by Southern Ispat & Energy Ltd. will give you an idea about my view on this stock. And for those asking about the Promoters' shareholding...We will get to know the latest Promoters' Shareholding with the December quarter results. My guess is that after the Merger & Acquisition is complete, Promoters' shareholding will go UP substantially.

Cheers!

avinash said...

promoter holding is only a concern thanxxxxxxxxxxx to solve it

sanjay said...

hi gem
i just want to know is this right to invest in siel at near about rs 5 level
sanjay

sanjay said...

hi gem
pleasr reply that is it the right time to invest in siel at current level about rs 4.5
thanks
sanjay

Superstar said...

Hi Sanjay,

Have been busy lately so couldn't take up individual queries. There has been a downtrend in the metals & commodity sector in general for the past few months. I think this trend might reverse in the coming few weeks. At current price one can start buying but only if you have a long term view. I would rather buy a Crew B.O.S at present.

Cheers!

ZorbaYogi said...

Dear Superstar,

Any chance that Southern Ispat could become a multibagger. A turnaround story. The most negative aspect is, the promoter has hardly any stake. Your views please.