Buy Mishra Dhatu Nigam, target price Rs 274: ICICI Securities

ICICI Securities has buy call on Mishra Dhatu Nigam with a target price of Rs 274. The current market price of Mishra Dhatu Nigam is Rs 191.2. Time period given by analyst is one year when Mishra Dhatu Nigam price can reach defined target.

Mishra Dhatu Nigam Ltd., incorporated in the year 1973, is a Mid Cap company (having a market cap of Rs 3569.76 Crore) operating in Metals - Ferrous sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 122.25 Crore, down -65.45 % from last quarter Total Income of Rs 353.83 Crore and up 4.46 % from last year same quarter Total Income of Rs 117.02 Crore. Company reported net profit after tax of Rs 18.81 Crore in latest quarter.

Investment Rationale
Low current utilisation and higher value blend through supplies to ISRO and defence can help increase Midhani’s topline meaningfully over the next 2-3 years. It expects RoCE to cross 20% as topline accretion takes shape. Capex remains limited; improvement in working capital and moderate capex will also help generate FCF.

Promoter/FII Holdings
Promoters held 74 per cent stake in the company as of June 30, 2021, while FIIs held 0.3 per cent, DIIs 14.1 per cent and public and others 11.6 per cent.