ICICI Direct has given Buy recommendation for Vardhman Special Steel with a target price of Rs. 300 in its research report issued on Jul 02, 2021
ICICI Direct’s research report on Vardhman Special Steel
Vardhman Special Steel (VSSL) has recently been granted the environmental clearance (EC) for expansion of capacity at its existing plant in Ludhiana, to up to 280000 tonnes per annum of rolled production. The company applied for the said approval in CY19. With this approval, the path for enhancement of capacity has been cleared. To begin with, the current rolling capacity of 200000 tonnes per annum would be increased to 250000 tonnes per annum. Total capex for the plan is expected to be ~Rs 250 crore.
We value the stock at 7.5x FY23E EV/EBITDA and arrive at a target price of Rs 300 (earlier Rs 240). We maintaining BUY recommendation on the stock.