Your views are invited on investing in Gujarat NRE coke.
Company has listed subsidary in Australia where it has coal mines and is now into oil exploration as well. A boost to Australia's export revenue is on the way with coal and iron ore miners close to settling massive price increases with China and Japan.Analysts believe coal prices will double, while Asian steel mills are expected to settle for a 60 % jump in iron ore prices, News Limited reports.If the increases are achieved, Australia`s export revenue from coal and iron ore is set to jump from billion to more than billion next year.From Economic times: Gujarat NRE Coke finds favour with investors of Oz A batch of foreign investors led by an Australian fund were seen buying shares of Gujarat NRE Coke in good numbers. According to these investors, floods in Australia, freezing weather in China and transport bottlenecks in Indonesia will stoke a sharp rise in the price of coal in other parts of Asia. JP Morgan recently raised its forecast for 2008 coking coal prices to 0 a tonne, a 42% jump from last year`s agreed price of .38. Its previous estimate was 0 a tonne. It is in this light that foriegn investors are accumulating shares of mining major Gujarat NRE Coke in good numbers.
Feb 17, 2008
Gujarat NRE coke
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Financials of Guj NRE Coke Quarterly Annual
Income Statement
(Dec '07) (06-07)
Net Sales 242.80 513.32
Other Income 9.77 20.26
PBDIT 84.26 126.52
Net Profit 49.97 55.73
BSE is revamping the A grp & list of cos in new A grp will b announced on 18.02.08 & GUJ NRE seems to b coming in the list of top 200 cos wrt Market Capitalisation & hence may enter the F& O segment.
Management is continously buying shares fr Open market as per BSE/NSE announcements. if it is coming in fno from 18-2-2008 in that case the share will jump start due to added liquidity. gold man sachs both is also said to be accumulating the share, it is expected that during the year the company may announce bonus as well (It has been giving bonus almost every year for last 4 years). coal market is quite hot and the prices are at peak due to restrictions by china. during march 08 qtr. the company will have far better results.
I agree about the views on this stock .....another thing to note is that is the projected infrastructure growth happens in India ....one thing that will surely be required is steel and hence, any industry supplying to steel and having a monopoly in that would be a good buy
Govt of India has revised the steel requirement by India upwards 3 times in tha last 2 years
Since 60% of steel making happens through the blast furnace/LD route....coke is a necessary ingredient
with very few coke supplies in India ...this company is slated for mega growth
With projected infrastructure growth slated for India, here is the
coal outlook for next 5 years (from a recent published report).
Coal requirement for the power utility will grow at a CAGR of around
10% during 2007-08 to 2011-12.
▪ Private coal washeries have rapidly increased the production of
washed non-coking coal in India during 2002-03 to 2006-07.
▪ High coking coal demand by the Indian steel industry and low
reserve base has boosted the import of coking coals.
▪ Coal demand from the Indian cement industry looks bright and it is
expected that coal requirement by the industry will rise steadily
from 2007-08 to 2011-12.
▪ Coking coal requirement in steel production is expected to touch
over 85.34 Million Metric Tons in 2011-12.
Let's look at the coal supply distribution to cement industry.
Coal India limited – 48%
Singareni Colleries – 26%
Imported – 21%
However cement industry is faced with problems of quality of
domestic coal, high ash content and non-uniform quality. Hence it is
looking for alternates like import. Similar issues are being faced
by other industries which depend on domestic coal. Given this
background companies importing coal like Guj NRE stand a good chance
for growth. So I agree with the views on this stock
-Manish
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